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ECONOMICS 



Industrial History 



FOR 



SECOI^DARY SCHOOLS 



BY 

HENRY W^THURSTON 

HBAD OP THK DEPAKTMBNT OF SOCIAIi AND ECONOMIC SCIKNCB; IN THE CHICAOO 
NORMAL SCHOOL 



CHICAGO 

SCOTT, FORESMAN AND COMPANY 

1899 

It 



'he 



Regfsfer of Copyrights, 



52430 



Copyright 1899 
By SCOTT, FOKESMAN AND COMPANY 



I' 



^'? 






PRESS OF 

THE HENRY O. SHEPARD CO., 

CHICAGO. 



TO THE 

MEMBEKS OF MT CLASSES IN" ECONOMICS 

IN THE 

HYDE PAEK HIGH SCHOOL, 

WHOSE EAENEST AND LONG-SUPFERING COOPERATION 

HAS MADE POSSIBLE 

THE EVOLUTION OF THIS BOOK. 



PREFACE 



For the last five years, the author has earnestly believed that 
a beginner in economics had a right to find the subject closely 
related to his own experience, and that of his neighbors, so 
that he would seem to himself to be studying the industrial 
life of actual men and women more than books about this 
industrial life. 

This manual is a result of the author's effort to put into 
practice in his own classes the idea just stated. It is sent 
out with the hope that his experience may prove valuable 
to other teachers who may make a similar effort. So far as 
he is aware, no such detailed and consecutive suggestions, 
as are given in Part I, for the first-hand observation, classifica- 
tion, and interpretation of some of the most fundamental 
facts and processes of the present industrial system are else- 
where accessible to the student. If well carried out, it is 
believed that they will be found of the greatest value, as they 
have all been tested in actual class-room experience. 

It is believed further that the method herein pursued, by 
which the laboratory study of existing economic life is supple- 
mented and enriched by showing the evolution of the indus- 
trial present from the industrial past — in short, the method 
of union between economics proper and "industrial history — is 
here worked out in a new and vital way. The method of the 
book, as a whole, includes : (a) an observational study of some 
of the data of economics — facts about the structure and func- 
tion of different parts of the existing economic system; (d) 
the consideration of a few facts of industrial history which it 

7 



8 PREFACE 

is hoped may help the student to realize that the present 
industrial system is a result of evolution ; and (c) an elemen- 
tary discussion of some of the most fundamental economic 
principles in accordance with which the present system now 
works. In short, the method is an attempt to combine, for 
pedagogic reasons, the inductive, historical, and deductive 
methods in the same book and oftentimes in the same exer- 
cise. 

It should be pointed out that, while it is believed that the 
book will give the best results when its parts are read in the 
order given, it may yet be profitably used in two other ways : 
(1) Part III may follow Part I at once, and Part II be read as 
supplementary reading, as a conclusion to the course, or 
omitted entirely; (2) Parts I and III may be omitted, and 
Part II alone studied. 

It should also be clearly stated that the questions were 
designed to be used differently in the three parts. The ques- 
tions of Part I aim at a considerable degree of continuity, and 
it is believed will give the best results if every pupil does his 
best to answer all the questions of each exercise. The ques- 
tions of Part II are not carefully consecutive, and different 
questions may well be studied by different pupils as they have 
special facilities for getting answers. In Part III it is not 
intended that an exhaustive answer to all the questions should 
be given. The subject is too large to be given a complete 
treatment in any elementary book. It has, therefore, been 
the purpose of the author in Part III to begin the discussion 
of the most fundamental economic principles and then by 
means of questions to lead earnest pupils to see that each sub- 
ject leads out in so many directions and so far that tliey will 
be compelled to recognize the limitations upon their own 
knowledge respecting it. It will be further noticed that 
many subjects ordinarily included in text-books on economics 
have been wholly omitted. If the questions of Part III, there- 
fore, can be so used as to leave a deep conviction that the discus- 
sions of the book are purposely incomplete, and that the study 



PREFACE 9 

of economics is merely begun by him who has read only these 
pages, their highest purpose will have been fulfilled. 

In a word, the ideal course in economics for secondary 
schools^ has seemed to the author to be one which seeks to 
train the student in the observation, classification, and inter- 
pretation of the data of economics ; make him conscious of the 
tendencies of great evolutionary movements in industrial 
society; and leave him in the presence of great theoretical 
and practical economic problems humble, but courageous and 
eager for further study. 

The author gratefully acknowledges his indebtedness to 
many persons for suggestion, courtesy, encouragement, and 
criticism. To most, only this general acknowledgment can 
be made, but personal mention is due the following gentlemen 
who kindly read the book in manuscript: Professor Fred- 
erick K. Clow, State Normal School, Oshkosh, Wisconsin; 
Mr. R. E. Cutler, Northwest Division High School, Chicago ; 
Dr. H. H. Belfield, Director of Chicago Manual Training 
School; and Professor E. G. Cooley, Principal-elect, Chicago 
Normal School. 

The author desires to express his especial gratitude to Pro- 
fessor Albion W. Small, of the University of Chicago, and 
to Mr. E E. Hill, teacher of Civics and Economics, Hyde 
Park High School, Chicago, to both of whom, at every stage 
of the work, he has been indebted for detailed criticism and 
generous encouragement. 

The intention has been to give, by means of footnotes 
throughout the text, full credit to author and publisher 
wherever such credit is due. In addition it is a pleasure to 
acknowledge the receipt of various special courtesies from the 
following publishers: The Macmillan Company, C P. Put- 
nam's Sons, Charles Scribner's Sons, Longmans, Green, & 

^To any one who wishes a further discussion of method, the au- 
thor's pamphlet on Methods of Teaching Economics in Secondary 
Schools will be sent by the publishers on application. 



10 PREFACE 

Company, Houghton, Mifflin & Company, T. Y. Crowell & 
Company, D. C. Heath & Company, Harper & Brothers, 
The Werner School Book Company, Silver, Burdett & Com- 
pany, Charles H. Nicoll, H. V. & H. W. Poor, Flood & 
Vincent. 

Chicago, December 11, 1899. 



CONTENTS 



Dedication . 

Preface . 

General Introduction 



PAQS 

5 

7 

13 



PART I 



INDUSTRIAL OBSERVATION AND INTERPRETATION 

Lesson I. Introduction and Observation of Occupations . 17 

II. Classification of Occupations .... 18 

III. The Classification Tested 19 

IV. Diagram of Local Occupations . . . . 19 
V. Local and National Occupations .... 20 

VI. Study of Actual Business ..... 21 

VII. Forms of Business 22 

VIII. Utility Defined . 23 

IX. Forms of Utility . 24 

X. Classification of Utilities 27 

XI. Producers and Non-Producers . . . . . 29 

XII. Definitions 32 

XIII. Ownership and Property 33 

XIV. Status and Contract 35 

XV. Economic Terms 36 

XVI. Graphic Statement of Industrial Facts . . 36 

XVII. Statements and Questions ..... 39 

XVIII. Illustration and Comparison of Prices . . 40 

XIX. Statistics of Personal Consumption .... 41 



12 CONTENTS 

PART II 

OUTLINES OF THE INDUSTRIAL HISTORY OP ENGLAND AND THE 
UNITED STATES 

PAQS 

Chapter I. The Home, or Family, Period of Industry in 

England 47 

II. The Gild Period of Industry in England . 67 

III. The Domestic Period of Industry in England and 

America 86 

IV. The Period of the Factory System of Industry in 

England and the United States . . . 134 

PART III 

ELEMENTS OF ECONOMIC THEORY 

Chapter I. Utility, Value, and Contracts .... 191 

II. Production 216 

III. Sharing the Product — Distribution . . . 235 

IV. Some Considerations which Affect Production and 

Distribution 250 

V. Consumption 272 

Appendix 279 

Authorities Cited 288 

Index 292 



GENERAL INTRODUCTION 



For a century the proverb has been in vogue: "The proper 
study of mankind is man." To-day it is the fashion to 
declare that the proper study of mankind is society. There 
is danger that the name "sociology" will furnish many an 
unwise teacher with pretexts for luring pupils away from sub- 
jects that they might profitably study to others which contain 
only snares and illusions for beginners. This book is not a 
treatise on sociology. It is, however, precisely the kind of 
guide to elementary study of social facts that sociologists 
should recommend. 

Sociology declares that every thing which every man does 
is connected with every thing which every other man does. 
Before it is possible to learn this truth except by rote, we 
must get acquainted with a great number of facts which 
exhibit the principle. We must learn to see how one act 
affects another in our own lives; how one neighbor's conduct 
has to do with another neighbor's comfort; how the things 
that we may do depend on the things that others have done. 

There are two ways of getting this knowledge. The one is 
by study of history, political economy, and political science. 
The other is by observing people, and particularly by ming- 
ling with people in as many occupations and circumstances as 
possible. Neither of these two methods is self-sufficient. 
Neither of them is wholly trustworthy without the other. 

The study of the sciences that deal with particular ways in 

13 



14 GENERAL INTRODUCTION 

which men act in society will never lose its charm, however ; 
it will never cease to enlarge and instruct the mind ; it will 
never fail to furnish elements of preparation for good citizen- 
ship. By study of history, economics, and civics, we in a way 
acquire as our own the experience of all the world. 

On the other hand, we do not know society as we should if 
we learn about it merely at second hand. If we never saw 
machines, but merely read descriptions of them, we could not 
become very expert machinists. If we never stepped foot on 
a ship, nor looked upon the ocean, we would not be likely to 
have great skill as marine architects. In somewhat the same 
way, if we merely study the sciences of society, we will know, 
after all, only an artificial substitute for real men and women. 
We need to open our own eyes and learn for ourselves. All 
the social facts that any science can find are passing before us 
every day. "We are not intelligent members of society until 
we know how to think these facts together in rational form. 

This book is a wise guide to proper use of both these 
methods. The student who learns from books alone is apt to 
be helpless with his knowledge when he is called upon to 
apply it. The knowledge that comes from observation alone 
is less likely to be of an impractical sort, but it is more likely 
to lack breadth; and it may, therefore, be ill adapted to 
application under changed circumstances. This book aims to 
give training that will make scientific knowledge practical, 
and practical experience scientific. 

Another rare feature in this book commends it especially to 
those who want to secure the highest order of results from 
study of society. The schools should teach civics, not to 
make officials, and economics, not to make financiers, but both 
to make good citizens. In too many cases, books on govern- 



GENERAL INTRODUCTION 15 

ment leave the impression that government is an end in itself ; 
and books on economics confirm the ready belief that to make 
money is the supreme duty of man. This book tends to the 
impression that business and politics are out of gear unless 
they serve to promote large and true life. Pupils can hardly 
follow the plan of study here proposed without gaining more 
liberal ideas of the things that most conduce to human weal, 
and are consequently most worthy and honorable. 

The kind of study here proposed is not mere reflection on 
dead, heartless abstractions. It is investigation of the inti- 
mate concerns of actual life. It stimulates social interest; 
it enlarges human sympathy; it develops love of justice; it 
rouses public spirit; it deepens the sense of civic obligation. 
In a word, it shifts the pupil's outlook from the standpoint of 
his private selfishness to that of the general welfare. Study 
of society by this method is thus not merely a preparation for 
citizenship, it is an apprenticeship in patriotism. 

Albion- W. Small. 

The University of Chicago. 



PART I 

INDUSTEIAL OBSEEVATION AND INTEKPKETA- 

TION 



Lesson I 



INTRODUCTION AND OBSERYATION OF OCCUPATIONS 

The satisfaction of human need for food, shelter, cloth- 
ing, amusement, instruction, social life, and inspiration 
toward doing right, costs continual human effort. To say 
this in another way, the problem of getting a living, using 
this word in the largest sense, takes a great deal of the time 
and effort of a great many people whom the student knows. 
The different ways actually taken by different people in their 
efforts to get a living ; the conditions imposed upon us by 
nature and by ourselves through custom and law ; the differ- 
ence between our present methods of getting a living and 
those of our ancestors; some queries about future methods of 
getting a living, and the problem of trying to find some order, 
unity, and law underlying all these activities and processes ; 
are the tasks to which the student is invited. For a 
while his text-book may be the members of his own family, 
his neighbors, his schoolmates, and all those persons he meets 
upon the street. He will often be directed to observe and 
report upon that which is familiar to him, but every question 
should be answered with his best thought, and in writing, for 
questions will soon appear that demand keen observation and 
clear thinking. The exercises will prove of little value to a 

17 



18 INDUSTRIAL OBSERVATION 

student unless constantly kept related, through his observation 
and thinking, to actual occupations, persons, and industrial 
processes. A simple way in which to begin to study indus- 
trial conditions is as follows : 

Make out an alphabetic list of fifty different occupations by 
which you know persons are regularly getting a living. 

Lesson II 

CLASSIFICATIOlSr OF OCCUPATIONS 

1. Write the following list of occupations in a column 
where they can easily be seen at a glance: Blacksmithing, 
farming, stage-driving, occupation of a commission merchant, 
medicine, tramping or begging, shoemaking, quarrying, ^ 
express business, real estate business, ministry, stealing, car 
pentry, mining, driving a locomotive, selling dry-goods, teach 
ing, occupation of an idiot, tailoring, fishing, conducting a 
street car, cigar-dealing, care of children and home by a 
mother, occupation of a poorhouse inmate, watchmaking, ice- 
cutting, running a steamboat, grocery business, hair-cutting, 
pleasure-seeking by an idle rich person. 

2. Study the list to determine those occupations which are 
at bottom most alike. 

3. Make six groups of live occupations each on the basis of 
this likeness, 

4. Give a name to each group. 

5. Criticize your grouping by asking these questions: 

a. Are the groups distinct each from the other? 
They should be. 

b. Is each occupation in the list included in the 
groups? In case of a somewhat complex occupa- 
tion, it may take more than one gi'oup to include 
all its activities. The question is: Can all the 
processes of each occupation be included in the 
groups formed? They should be. 

G. Be prepared to give reasons for your classification, and 
to defend it in class. 



DIAGRAM OF LOCAL OCCUPATIONS 19 

Lessoist III 

THE CLASSIFICATION TESTED 

1. Classify, on the basis of tlie grouping adopted, an alpha- 
betic list of one hundred and fifty occupations not already 
classified. 

[Note. — The question will arise whether to classify some 
person from the point of view of the whole business with 
which he is connected, thus making each business as a whole 
the unit of classification, or to classify him from the point of 
view of his individual activity. A stenographer in the employ 
of a railroad company might be classified with railroading, and 
one in the employ of a college president with education, in 
which event the two stenographers would appear in different 
groups. On the other hand, they might be classed as stenog- 
raphers per se, in which event they would be gi'ouped together. 
The first way of grouping is more convenient, more like 
the practice of the Census Bureau, and the latter, if well 
done, is more accurate. On the whole, for the purpose of 
these lessons, it will probably be found more satisfactory to 
classify most individual occupations on the basis of the whole 
business with which they are connected, rather than upon the 
basis of the individual activities of the persons themselves. 

2. Make note of all occupations difficult to classify.] 

Lesson IV 

DIAGEAM of LOCAL OCCUPATIONS 

1. If the town in which you live has a directory, begin 
with the first name under some letter and read consecutively 
until the names of one hundred persons who are reported as 
engaged in gainful occupations have been read. Classify 
these occupations as in the preceding lesson. 

2. If some of these occupations can not be classified on 
account of lack of information about them, for example, 
Ijiborer and clerk, note also the number unclassified. 



20 INDUSTRIAL OBSERVATION 

3. Find what per cent the number in each group is of the 
hundred occupations noted; and make a series of lines, or bars, 
accurately drawn to a scale, which represent by their lengths : 

a. The total number of occupations noted. 
h. The per cent which the number in each group is 
of the total. 

4. Make note of all difficulties for discussion in class. 
[Note. — Each pupil should have a note-book in which all 

diagrams and other valuable results of the study may be con- 
veniently kept. Diagrams may be made more attractive by 
using different colors. Some of the diagrams in this lesson, 
and others that follow, may be made large enough to be hung 
up in the recitation room. 

If each pupil has a different list of names assigned from the 
directory, the total number of occupations reported on by the 
class will be as representative of the occupations of the whole 
town or city as j)ossible. 

If there is no directory, each pupil may report upon the 
gainful occupations of all the persons residing in a certain 
block, or within certain limits along a certain street, the 
assignments to different pupils being so planned that the total 
of their reports may be as representative of the whole town as 
possible. The occupations so obtained may be grouped, 
computed in per cents, and represented by lines, as directed 
above.] 

Lesson V 

LOCAL AND NATIONAL OCCUPATIONS 

1. Make another diagram in your note-book after the 
same plan as that of the preceding lesson, except that the 
numbers used are the totals for the class instead of your 
individual numbers. 

2. Make a third diagram based on the following figures of 
the United States' Census for 1890:^ 



'For detailed statistics of occupations of persons iu the United 
States in 1890, see Statistical Abstract of the United States for 1898, 
pp. 20-23. 



STUDY OF ACTUAL BUSINESS 21 

a. Whole number of persons engaged in 

gainful occupations in the United States, 22,735,661 
h. Engaged in extractive industries . . . 9,013,201 

c. Engaged in professional, domestic, and 

personal service 5,304,829 

d. Engaged in trade and transportation . 3,325,962 

e. Engaged in transforming industries . . 5,091,669 

Lesson VI 

STUDY OF ACTUAL BUSI]S'ESS 

In order to give satisfactory answers to the following 
questions, a concrete business, no matter how simple, with 
which the pupil is best acquainted and about which he can 
learn most accurately, should be chosen by each member of the 
class. Much depends upon the accuracy and directness of the 
information. The very soul of this work is its dependence 
upon facts. In asking questions pupils need tact. It may 
be explained that names of persons and of companies are not 
wanted. What is wanted is to find out the machinery of the 
business, just how it is carried on. 

1. Name of the business or occupation. 

2. Give a brief description of the land, building if any, and 
other equipment required to carry on the enterprise. 

3. Who owns the land, a person or a group of persons? 

4. What evidence of ownership does the owner have? 

5. Who owns the building? 

6. Who owns the rest of the equipment? 

7. Who actually carries on the business, "is back of" it? 

8. What different grades of helpers does he have? 

9. Give the approximate number in each grade. 

10. Give the ordinary business name of each form of pay- 
ment which is made to owners simply as owners of something 
necessary to the business. 

11. Give the ordinary name of each form of payment that 
is made to persons as active participants in carrying on the 
business, both in the management and in the ordinary work. 



22 INDUSTRIAL OBSERVATION 

12. Are there any other persons, or groups of persons, aside 
from those who furnish it materials or buy its product, who 
regularly receive some payment from this enterprise? If so, 
name them and explain on what ground they receive these 
payments. 

13. Enumerate all the different groups of persons who, 
from what they own or from what they do, regularly furnish 
something necessary for the carrying on of this enterprise. 

14. Give the business name of each of these persons or 
groups. 

Lessor VII 

FOEMS OF BUSINESS 

In the preceding lesson some important words were used 
that may, perhaps, be new to certain members of the class and 
not understood alike by others. To the end, therefore, that 
the words may have a definite and common meaning, the 
following questions are proposed : 

1. Find actual business enterprises illustrating as many of 
these words as possible : 

a. Partnership. 
h. Stock company. 

c. Corporation. 

d. Profit-sharing enterprise. 

e. Cooperative enterprise. 
/. Trust. ^ 

2. Write a description of each with the aim to distinguish 
it from all the others. 

3. Find out something about the manner of organizing a 
business of each kind in accordance with the laws of your state. 

4. Which is most commonly found in your locality? Why? 

5. What is the object of each form of organization? 

iPor meaning of terms, laws of state, etc. , consult : the diction- 
ary ; the encyclopedia ; Lalor, Cyclopedia of Political Science and 
Political Economy, vol. Ill, index — Maynard, Merrill & Co., New 
York ; the Revised Statutes of your own State ; Schloss, Methods of 
Industrial Remuneration — 2d. ed., 1894, G. P. Putnam's Sons, New 
York, or 3d. ed., 1898, Williams & Norgate, Oxford, 



UTILITY DEFINED 23 

Lessost VIII 

UTILITY DEFINED 

In the lessons that have preceded, opportunity has been 
gi^en for the idea to emerge that the apparent chaos of busi- 
ness activity which one observes, especially upon the corner of 
a crowded city street, is only apparent, and that all these 
activities can be reduced to five or six well defined groups of 
activity. It has also appeared from the study of concrete 
business units, or enterprises, that, while there is great 
variety in form of organization and relationship of persons to 
the enterprise, the same functions appear in all enterprises 
whether they are all performed by one person or by many. 
As both of these results are in the direction of a perception of 
uniformity and simplicity and order in what at first seemed to 
be very complex phenomena, there remains one further step 
to take in the same direction. Can we not find some common 
purpose in the activities of all workers? Is it not possible to 
discover some principle of unity which will allow all workers 
to be thought of together? Are they all in fact doing 
fundamentally the same thing, namely, creating utility? 

1. Write a brief but complete description of a typical day's 
work by some one intimately known to you. 

2. What was the object, or objects, upon which at some 
time during the day he exerted his activity? 

3. Tell, precisely, what change took place in this object as a 
result of the expenditure of the worker's energy. 

4. How does the desirability of the object, to those in any 
way affected by the change, compare after the expenditure of 
energy with its desirability before? Is the object more or less 
desirable? 

[K"OTE. — The word "desirability" is here used not in an 
absolute sense, but as related to human wants. These wants 
are not always wise, or moral. "Primarily, and as a condition 
to his [man's] mere existence, he requires food, commonly, 
also, clothing and shelter. He has appetites for art, music, 



24 INDUSTRIAL OBSERVATION 

philosophy, cigars, and vice. He desires comforts and lux- 
uries, protection from the violence of nature, from the wrongs 
of men, and from the attacks of beasts and microbes. He 
wants his steak broiled and his clothes brushed. He likes to 
be preached to, and sung to. He wants books and boats, and 
racehorses, laces, parks, theatres, and eyeglasses, chairs, 
balloons, railroads, panoramas, fortune-tellers, phrenologists, 
and humbugs."^] 

5. From the point of view, therefore, of desirability of the 
object worked upon, as different men judge desirability, what 
did the person really do, or attempt to do? 

G. Show whether or not other workers, working for gain, 
from affection, or from a charitable motive, attempt to make 
a similar change in the objects they work upon. Give illus- 
trations, 

7. Write out a definition of the word ''utility." 

Lesson IX 

FORMS OF UTILITY 

It is the want-satisfying quality — utility, that the wants of 
mankind spur men on to try to produce. The question now 
comes, how is utility produced? Must men have materials in 
which to store this quality? If so, what is the som'ce of these 
materials? How can men manipulate materials so that utility 
may be added to them? Is complete utility added to material 
by one worker as a rule, or does the same material pass through 
many hands in succession, each worker adding some utility? 
Since utility is a quality in material which satisfies the want 
of persons, may changes in human wants, as well as changes 
in objective materials, cause utility to emerge and disappear? 

If the following specific questions are carefully answered, 
much light may be thrown upon the more general questions 
of the preceding paragraph. 

^Davenport, Outlines of Economic Theory, p. 14 — 1896, The Mac- 
millan Co., New York. 



FORMS OF UTILITY 25 

1. What human wants are there that are sometimes satisfied 
directly by nature, without other effort by man than that 
required to appropriate what nature furnishes? Give as 
varied examples as possible. 

2. When man does not have his want satisfied by nature, 
but creates this quality of satisfying want (utility) , from what 
source does the material upon which he works, and in which 
he stores utility, come? Illustrate. Is there any other 
primary source? 

3. Give examples of utilities that have been wholly created 
by the effort of one man, possibly in a succession of processes, 
or partial processes ; give examples where two workers in suc- 
cessive processes have created utility ; examples of three work- 
ers ; more than three ; the example where the whole process 
of creating utility is divided among the largest number of 
grades of workers known to you. 

4. Define division of labor. 

5. Give illustrations of division of labor among places; 
among persons. 

6. Give in one word the kind of utility that is added to coal 
by being broken out of the solid vein, to clay when pressed 
into moulds to make brick, to stone when carved into a 
statue. 

7. Give another word which describes the kind of utility 
created by carrying lumps of coal from a mine to a city. 

8. Name in one word the kind of utility that coal possesses 
by being in a grate in December rather than in August, by 
having ice in the house in August rather than in December. 

9. Give other examples of each kind of utility. 

10. When the actor arranges scenes, costumes, attitudes, 
and facial expressions so as to send, on the vehicle of vibrating 
ether, intense satisfaction to the eye of the onlooker, show 
whether or not he creates utility ; show whether or not he also 
creates utility when he sends pleasing sounds on the vehicle of 
vibrating air. 

11. Give other kinds of utility if you can. 



26 INDUSTRIAL OBSERVATION 

12. Is the spiiitual uplift which comes from the preacher 
utility? Why? Is the legal advice which a lawyer gives to a 
client utility? Why? 

13. Show that Phillips Brooks, as a preacher, and the boy 
who blacked his boots, were doing fundamentally the same 
thing. 

14. If men feel new wants for things to which, though in 
existence before, they had been indifferent, do those things 
acquire utility? Why? Give examples. Do spinning wheels, 
old-fashioned furniture, etc., that once lay forgotten in 
garrets and lumber rooms, illustrate the point? Give 
reasons. 

15. If men cease to care for some thing which they formerly 
wanted, does this lose utility to some degree? Why? Give 
examples. 

16. What are the effects of fashion upon the utility of a 
commodity? Illustrate. 

17. Discuss the following formula, and its interpretation as 
a convenient short statement of the truth about any productive 
enterprise. Do you think of any business enterprise that can 
not be included in the formula? Explain. 

a. Society 4-man4-capital+ natural resources=utility. 
J. A more accurate statement might be: Society, 
combined with 



individual men, ] 



As undertakers | 

As directed workers, f 



combined with capital, combined with natural 
resources, may result in utility, 
c. Which formula may be interpreted as follows : In 
subordination to the public opinion and statute 
laws of the community as a whole, individual men 
direct human energy in the use of tools and ma- 
chinery upon the materials and forces which natvu'e 
furnishes, in order to produce something to satisfy 
human want. 



CLASSIFICATION OF UTILITIES 37 

18. Do individual men ever carry on business enterprises 
for tlie production of utility in violation of public opinion and 
statute laws of society? Give examples. 

19. Which is the more common method of carrying on 
business — subject to the will of society or in violation of it? 
Give reasons. 

20. Do individuals ever cause changes in public opinion and 
in laws for the benefit of their own business? If so, how? 

21. What is the harm of it? 

22. How can it be helped? 

[Note. — For a series of interesting articles entitled The 
Conduct of Great Busitiesses, consult "Scribner's Magazine," 
beginning January, 1897. 

The subjects of the separate articles are: "The Department 
Store," "The Business of a Factory," "The Working of a 
Bank," "The Business of a Newspaper," "The Modern Busi- 
ness Building," "The Business of a Great Wheat Farm," "A 
Great Hotel."] 

Lessojst X 

CLASSIFICATION OF UTILITIES 

It often takes good thinking to be able to state clearly what 
it is that one does not understand. But, if the pupil strives 
to do this, he will often help not only himself, but others. 

We have seen in the preceding lessons that man's wants 
range from the most primary physical wants to the highest 
spiritual ones. There is, therefore, good reason for calling 
every quality in matter which tends to satisfy any want, or 
tends to prevent the emergence of a want, a utility. There 
is, however, such a difference in the duration of utilities that 
it is worth while to give our attention to this difference. On 
the basis of the duration of utilities two great classes of goods 
may be formed. 

1. When utility is stored in a bicycle, by how many persons 
in succession can it be partially appropriated? 

2. Compare the utility of a book, of a house, of furniture, 
with that of a bicycle. Give other examples. 



28 INDUSTRIAL OBSERVATION 

3. The utility of a bicycle is said to be potential.^ 

4. When utility is given to air by a sweet singer, or to 
ether by a fine actor, show whether or not this utility can be 
partially appropriated by many persons in successive moments, 
or hours. The vibrations of one rendition of the song, 
not the singer's vocal cords or power to sing, should be 
thought of. 

5. Give other similar examples. 

6. The utility of a song is said to be actual.^ 

7. Is the utility of clothing actual, or potential? Of fuel? 
Of food? 

8. Is it hard to draw the line with accuracy between the two 
classes of utilities? Why? 

9. Is it worth while to attempt to make the two classes? 
Why? 

10. Is it hard to draw the line with accuracy between plants 
and animals? Give reasons. 

' ' 'The utility of a commodity is said to be potential when the 
power of utilizing can be transferred any number of times." 
— Shirres, An Analysis of the Ideas of Economics, p. 241 — 1893, 
Longmans, Green, & Co., New York. 

2 "The utility of a commodity is said to be actual when the trans- 
feree merely receives actual benefit, enjoyment, or utility in the 
present." The same, p. 241. 

"Everything that affects our senses, whether it be part of the 
external world in which men live, or a positive or negative act of 
one or more men with respect to another man, may be a commodity, 
i.e., it may satisfy a want, extinguish a painful sensation, or engen- 
der a pleasurable one. What is necessary is, that what we consider a 
commodity should be brought to our knowledge, by means either of 
our nerves of general sensibility, or of our specific nerves; that is: 
it must either affect our sense of touch, appearing hard or soft, 
heavy or light, warm or cold, or else our senses of taste, smell, sight, 
or hearing. Hence we must regard as being equally commodities : 
bread, clothing, medical advice, the speech or pleadings of counsel, 
the credit embodied in a bill of exchange or contract, the vocal per- 
formance of a prima donna, the resort of customers to a place of 
business, the abstention from competition on the part of manufac- 
turers restrained by the exclusive patent rights of another, the 



PRODUCERS AND NON-PRODUCERS 29 

11. Is it worth while to attempt to make two classes of 
living things? Why? 

12. Define utility. 

a. Actual. 

1). Potential. 
[Note. — A distinction should be made between utility 
which is a quality, and the material, or vehicle, in which 
utility resides or travels. Any material possessing utility may 
be called a "good" or "commodity." Goods possessing 
potential utility may be called "wealth," and goods possessing 
actual utility may be called "service." We buy the service 
of a teacher, singer, or preacher ; and wealth from a farmer 
and a weaver, in potatoes and cloth.] 

13. Give a list of twenty-five forms of service; of twenty- 
five forms of wealth. 

14. Criticize the following classification of utilities with 
especial reference to the position of form, place, and time 
utilities : 



Utility. 



1. Form. 

Actual. { 2. Place. 

3. Time. 

f 1. Form. 

Potential. -^ 2. Place. 

3. Time. 



1 



15. If the diagram is thought to be correct, give an 
example of a utility for each of the six numbers at the right 
of the diagram. 

Lesson XI 

PRODUCEES AND NON-PRODUCERS 

The purpose of this lesson is to delay the mind still longer 
upon the processes by which men create utility, and to bring 
out as clearly as possible the distinction between producers 

abstention from bidding at an auction on the part of capitalists 
restrained by some (possibly altruistic) interest, and the discoveries 
of the scientific investigator." — Pantaleoni, Pure Econoviics, pp. 
63-65—1898, The Macmillan Co., New York. 



30 INDUSTRIAL OBSERVATION 

and non-producers. Until recent years the common view was 
that only those persons who were producers of wealth, engaged 
in storing utility in some material which allowed men to be a 
long time in appropriating ifc, were productive. A more recent 
view is that any person who succeeds in creating utility is a 
producer, whether that utility be a fleeting service or an 
enduring form of wealth. Only those persons who for 
some reason fail to create utility are non-producers. In 
judging of children and the aged as producers or non-pro- 
ducers, will you think of their whole lives or of a few 
years only? Why? 

I. Which class of utilities (actual or potential) does 
the extractor usually produce? Illustrate for typical ex- 
tractors. 

3. Which class does the transformer produce? 

3. The transporter? 

a. In carrying goods? 

b. In carrying persons? 

4. The transferrer? 

5. The servant? 

6. The parasite? 

7. Illustrate for each group. 

8. Show whether the net result of a true parasite's life is to 
increase, or decrease, the utilities of the world. 

9. Is his life productive or non-productive? Of what? 

10. Suppose a man tries to sing, and fails ; is he, so far as 
this effort is concerned, productive or non-productive? Of 
what? 

II. If a man tries to make a new machine, and fails; is he 
productive or non-productive? Of what? 

12. Define producer. Non-producer. 

13. Are most of the mothers and housekeepers in our 
homes, who are not reported in the Census as engaged in 
gainful occupations, producers or non-producers? Of what? 
What have you to say of children and the aged? 

14. Criticize the following diagram ; 



PRODUCERS AND NON-PRODUCERS 



31 



' Natural. 



' Having ( Rainbows. ] 

actual j > Natural service, 

utility. ( Cooling breezes. ) 



Goods 
having ■ 
utility. 



Modified 
by man. 



r Fertile soil. 
Having 

potential <! Mines. 
[ utility. 

L Standing timber. ^ 

r Music. 
Having | 

actual -i Instruction, 
utility. 

[ Hair-cutting. 



Having 

potential 

utility. 



' Houses. 

Cultivated soil. 

Tools. 
I, Books. 



Natural vi^ealth. 

Human service, 
service proper. 

\ Wealth proper. 



15. Criticize the following diagram: 



ECONOMIC CLASSIFICATION OF MEN 



' Servants. 
Producers 
of utility. 



Men. <! 



Dependents. 
Non-pro- 
ducers of 
utility. 



Servants 



r Personal. 
Domestic. 



Those who serve j "'''fnL ] Public, 
as directly as pos- ! ^" caiiea. |^ Professional, 
sible - produce ac- ] 

Transferrers. 



tual utilities. 



Transporters of persons. 



f Extractors. 
Those who serve less | 
directly — producepo- <J Transformers. 
^ tential utilities. | 

[ Transporters of goods. 



Those who are able to serve — to 
produce utility — and yet are 
dependent from choice. 



Parasites. 



Those who are unable to serve [ Defectives, 
— to produce utility — through j the unfortu- 
misfortune or inability. 1 nate poor, 

t etc, 



32 INDUSTRIAL OBSERVATION 

Lesson XII 

DEFINITIONS 

In making the following definitions, if the pupil depends 
more upon his own thinking than upon any definitions found 
in a book, he will be the gainer. His attention has been 
called in the preceding lessons to all the realities for which 
these words are names. He, therefore, now has the difficult 
but definite task of trying to make his definition of each word 
include all the individuals that belong to that class, and none 
that do not. 

Plato's well-known definition of man as "a two-legged 
animal without feathers" was faulty, because his pupil could 
bring to him a plucked fowl, and say, "Your definition makes 
this a man." The definition was too inclusive. On the 
other hand, a definition of man which would apply to Anglo- 
Saxon men only would err in the other direction of not being 
inclusive enough. A perfect definition of man would include 
all animals that are men, and exclude all animals that are not 
men. Oftentimes a perfect definition cannot be made: a 
good one always requires good thinking. 

1. Define and illustrate the following words: 

a. Extractor. k. Utility. 

b. Transformer. I. Actual utility. 

c. Transporter. m. Potential utility. 

d. Transferrer. n. Production. 

e. Servant. o. Consumption. 

/. Dependent. p. Division of Labor. 

g. Landlord. q. Service. 

h. Capitalist. r. Wealth. 

i. Undertaker. s. Parasite. 
j. Laborer. 

2. If the machine shops of a railway company are taken as 
an illustration of a transforming enterprise, it is found that 



OWNERSHIP AND PROPERTY 33 

transforming enterprises in general require the following 
functions of persons : 



Transforming Enterprises 



'Society function 
Landlord function 
Capitalistic function 
Undertaking function 

^ Ordinary labor function. 



Choose a typical business in the extractive group, transfer- 
ring group, transporting group, and servant group, and ask, in 
each case, whether or not the enterprises of the group require 
all of the same functions as those given above. Do you find 
any exceptions? Explain. 

Lessoist XIII 

OWNERSHIP AND PEOPEETY 

The observation and thought of the class have now been 
directed to the great mass of humanity about them as composed 
of men and women who, from the economic point of view, 
are busily engaged in the process of satisfying their wants by 
producing and consuming a great variety of utilities. It is also 
a well-known fact that some utilities which men consume they 
themselves produce, but that in a majority of cases men expect 
to give up goods possessing the utility which they have pro- 
duced in excess of their own wants, to others, in exchange for 
the different kinds of goods possessing the utility that others 
have produced. Consideration will be given later both to the 
subject of original production, and the facilities for exchange 
of goods. Just at this point the fundamental importance of 
ownership is to be emphasized. Ownership was mentioned in 
Lesson VI, and the word is familiar to everybody ; but perhaps 
some fail to realize how fundamental it is to existing methods 
of getting a living. In fact, almost all modern processes of 
creating, exchanging, and consuming utilities rest on the 
foundation of private property, or ownership. It is interest- 
ing to try to understand what private ownership really means 
and what are its alternatives. 



34 INDUSTRIAL OBSERVATION 

1. Look up the meaning of property right and ownership in 
the dictionary and the encyclopedia. 

2. Show that ownership means at least the right to use in 
one's own person the thing owned. 

3. If a person owns land, must he cultivate it himself if he 
is to get any utility from it? If not, in what other ways can 
he get utility out of it? 

4. If a man owns a thing, must he continue to own it? If 
not, name the ways by which he may dispose of it during his life. 

5. Does he have power to say what shall be done with his 
property after his death? Illustrate. 

G. The Roman lawyers defined full ownership to be jus 
utendi, friiendi, et abutendi. Translate and illustrate each 
part of this definition. 

7. Who may own property in the state in which you live? 
Give authority. 

8. Make a list of typical things which an American citizen 
may own in your state. 

9. What things are there in your town that private citizens 
do not individually ovfn? Make a list of them. 

10. To whom do they belong? What kind of property are 
they? 

11. What things about you are not represented in either of 
the above lists? 

13. Make an estimate in money of the value of public — 
social — property in your town, city, county, or state. Is such 
property increasing? 

13. If some things are not fully owned by anybody, why are 
they not? 

14. Is the list of things that may be private property, the 
same in all countries at the same time? In the same country 
at different times? Illustrate. 

15. Who decides this in the United States? 

16. Give examples from history for each answer in 14. 

17. What kind of ownership does socialism propose? Com- 
munism? Anarchy? 



STATUS AND CONTRACT 35 

Lesson XIV 

STATUS AND CONTRACT 

It is the purpose now to call attention to the great number 
of agreements, bargains, or contracts, that determine the eco- 
nomic relations of men to each other. In the days of slavery 
and serfdom the relations of these classes to their superiors 
were largely determined by birth, custom, or mere status of 
the parties concerned. It may be objected that the conditions 
under which many men make contracts to-day are such that 
they live very hard lives, but the fact, nevertheless, remains that 
in form their lives are lived in fulfilment of certain agreements 
that they themselves make. Some reasons why they sometimes 
can not make better bargains will be briefly discussed later. 

1. Look up the meaning of the words "status" and "con- 
tract" in the dictionary. 

2. What freedom do men in your state have to make any 
kind of contract with each other they choose? Give examples 
of limitations. 

3. Give examples of relations between persons which are 
determined by a contract, verbal or written. 

4. Apply the words status and contract to explain the 
difference between a slave in the United States before the war, 
and the condition of men who work for salaries or wages, now. 

5. Enumerate the particulars, if any, in which the eco- 
nomic condition of the slave was better than that of the 
workman of to-day. 

Keep these facts in mind if you ever hear the phrase "pass- 
ing from the condition of status to that of contract." 

6. Show the relation between the fact of private property in 
its full sense (the right to dispose of, to possess and use in 
person, and to enjoy the fruit of), and the fact that some men 
begin their business lives as employers and others as employees. 

7. Among a people who subsist by hunting are some persons 
employed and some employers, as among us? Why? 

8. Show the relation between the right of private property 



36 INDUSTRIAL OBSERVATION 

and the fact of the existence of a so-called "idle rich class" in 
modern society. 

9. How does this class get a living? 

10. Show that the goods which come to men as landlords, 
capitalists, undertakers, and wage-workers are dependent upon 
the right of private property and a large freedom of contract. 

11. Show that the right of private property and large free- 
dom of contract are fundamental to the existing business 
relations and enterprises of extractors, transformers, transfer- 
rers, transporters, and servants. 

Lesson XV 

ECONOMIC TEEMS 

The proof of understandi^ig is right use. Some new 
words, and other more familiar ones having technical mean- 
ings, have been introduced in the foregoing lessons. May not 
each now be used correctly in a continuous narrative? This 
need not be long, but each word should be used accurately in 
its technical sense, if there is a difference between this and its 
ordinary meaning. 

Write the complete history of the making of a loaf of 
bread, a pair of shoes, a coat, or some other common article. 
The essay should contain appropriate mention of the activity 
of men in each of the first five economic groups, extractive, 
transforming, etc. ; also the words, utility, consumption, 
ownership, production, private property, contract, under- 
taker, capitalist, landlord, workman, want, service, wealth, 
division of labor, rent, interest, wages, money, profits, and 
value. 

Lesson XVI 

GRAPHIC statement OF INDUSTRIAL PACTS 

As men are, as a rule, engaged in the production of 
utilities in order that they and those dependent on them may 
themselves consume those utilities, or other utilities which 
they get in exchange, it is an interesting question to ask how 



GRAPHIC STATEMENT OF INDUSTRIAL FACTS 37 

men compare with each other in the valne of utilities which 
finally come to them for consumption. To this end a compi- 
lation of answers to the following questions will be found to 
contribute much: 

1. Name of the occupation reported upon? 

2. Under whose direction does the person work? 

a. His own? 

h. A single employer? 

c. A private corporation? 

d. A public corporation (town, city, state, etc.)? 
\\. What are his hours of work and leisure? 

a. Hours actually at work per day? 

5. Hours daily in going to and from work? 

c. Hours of holiday per week, excluding Sunday? 

d. Hours of work on Sunday? 

e. Length of annual vacation for which the worker 
is paid at whole or partial rate of regular pay- 
ment? 

4. Detailed program of a typical day's work? 

5. How paid? 

a. Amount of payment per month? 
h. How is this determined (piece-wages, time-wages, 
commissions, etc.)? 

c. How often paid? 

d. Form of payment (currency, check, truck, etc.)? 

6. Effect of occupation on the worker? 

a. Physically? 
l. Mentally? 
c. Morally? 

7. Number of persons dependent upon earnings? 

8. Contented, or discontented, with the person's own 
reasons for either? 

9. Summarize the answers of different members of the class 
upon the following diagram : ^ 

^The diagram may be so enlarged as to give a line for each stu- 
dent's report. 



38 



INDUSTRIAL OBSERVATION 



— 




— 


— 


— 


— 


— 


— 


— 


— 


Name of occupation. 


Economic group. 






















For whom working. 






















Hour.s of work per day. 






















Hours to and from work. 






















Time for luncheon. 






















Hours of holiday per week. 






















Work on Sunday. 






















Length of annual vacation. 






















Amount of wage per month. 


— 


1 


— 




— 


— 


— 




— 


How determined. 






When paid. 






















In what form paid. 






















Physical effect of work. 


— 


— 




— 


— 












Mental effect. 


— 


— 


— 


— 


— 


Moral effect. 


Number of persons dependent. 






















Contented. 






















Worker's reasons. 



STATEMENTS AND QUESTIONS 39 

Lesson XVII 

STATEMENTS AND QUESTIONS 

1. Read all the items in each vertical column in succession. 

2. Make a statement after each column is read. For exam- 
ple, after reading items under "hours of work per day," the 
statement might be: "The workday of some men is much 
longer than that of others;" and after reading the items 
under "amount of wages per month," the statement might 
be: "There is a variation in wages, among the people here 
described, from $ — per month to $ — per month." 

[Note. — Each of these statements is simple by itself, and its 
truth was probably known before, but when the statements 
are all put together and we realize that persons actually known 
to members of the class show variations in industrial condition 
in from fifteen to twenty-five particulars, these simple state- 
ments become interesting and demand of us that we try to find 
out why they are true.] 

3. Compare all the facts given about one person with all 
the facts given about another person; that is, read one 
line and compare carefully with another line, and make other 
statements, as in 2, as to differences in economic condition. 

[Note. — Avoid all such general statements as "Those who 
do mental work get more pay than those who do manual 
work," and "Janitors get less pay than any other class of 
persons." Such statements may be true for the persons 
described in a given diagram, but are these persons numerous 
enough to warrant such sweeping statements? Statements 
should be made in such a form that they will remain true no 
matter how many more cases may be investigated.] 

4. Make out also a list of questions suggested by the dia- 
gTam, but not necessarily answered by it. Make this list as 
long and as sensible as possible. It is surprising to see how 
many excellent questions as to causes and results of the facts 
shown on the diagram can be asked. As many as forty have 
been made by one class. 



40 INDUSTRIAL OBSERVATION 

Lesson XVIII 

ILLUSTRATION AND COMPARISON OF PRICES 

We are all familiar with the common practice of comparing 
all sorts of goods with one good (and representatives of this 
good), called money, to find prices. Whenever a person decides 
upon the least amount of money which he will take for a good, 
there is a case of "seller's price." Whenever a person decides 
upon the largest amount of money he will give for the good of 
another, he furnishes an illustration of "buyer's price." But 
there is another price which is not so well understood as these 
two, namely, "market price" ; and, although more will be said 
about price later, it is possible to study some examples here. 

1. Read in the market column of several daily or weekly 
papers the prices of the goods or commodities most com- 
monly sold from your locality. 

2. Make note of the different prices for the same commod- 
ity on different dates, with reasons for the differences, if they 
are given. 

3. Ask men who have commodities to sell what use they 
make of these market prices. Ask the same question of 
people who wish to buy. 

4. Give illustrations of what happens to commodities of 
your locality when the market prices have been going up for 
several weeks. 

5. Give examples of the result when prices have been 
going down for several weeks. 

6. Give the names of as many institutions as you can which 
"fix" from day to day the market prices of meats, grains, 
vegetables, steel, wool, cotton, lumber, coal, unskilled service 
or labor, skilled labor, etc. 

7. Show whether the producers of some of these goods are 
helped or hindered in disposing of them, by these institutions. 

8. Ascertain if these institutions perform a genuine service 
for the buyers and sellers. Decide whether or not such insti- 
tutions produce utility. 



STATISTICS OF PERSONAL CONSUMPTION 41 

9. Show that the market prices of one commodity are of 
interest to producers over a wider area than the market 
prices of another. 

10. Give an example of a commodity whose market price 
affects the largest area of producers. An example of a 
commodity whose price affects the smallest area. 

11. What makes the difference? 

12. How do these market prices compare at different times 
with what buyers are ready to pay and with what sellers are 
ready to take; in other words, with buyers' and sellers' 
prices? 

13. Does a sale at a market price ever benefit both buyer 
and seller? If so, how much? Explain. 

14. Suppose market prices are lower than sellers' prices for 
several years in succession, how does this affect the amount of 
the commodity produced? 

15. Suppose the opposite is true, how is the amount 
affected? Why? 

LESsoisr XIX 

STATISTICS OF PEESONAL COKSUMPTIOK 

By means of money it is possible to compare roughly the 
amounts of utility enjoyed or consumed by different people. 
Our own place in the scale of consumers is of special interest. 

1. Under the headings given below, make an estimate of 
the price of goods consumed by you personally during a year. 
This report need not be signed.^ 

a. Shelter, — ^rent of place (or interest on value of 
place and furniture, plus taxes, plus insurance), 
divided by the number in the family. 

b. Food, — grocery bill, plus meat bill, plus ice bill, 
etc., for the year, divided by number in the 
family. 

iThe author is indebted to Mr. E. E. Hill, of the Hyde Park High 
School, Chicago, Illinois, for this exercise. 



42 INDUSTRIAL OBSERVATION 

c. Fuel and Light, — total cost divided by number in 
the family. 

d. Personal Services, — wages of servants divided by 
number in family, plus services paid for private 
teachers, cost of public school per pupil to the 
taxpayers, etc. 

e. Clothes. 

/. Recreation and sundry expenses. 
g. Total. 

2. Summarize the results for all the members of the class, 
and find an average. Compare this average with: 

a. The prices of goods consumed by some of the per- 
sons reported on in diagi'am made as suggested in 
Lesson XVI. 

b. The following statistics of income •} 

INCOME OP THE UNITED STATES 

FAMILY INCOME. NUMREr. OF FAMILIES. 

§5000 and over 200,000 

$5000 to $1200 1,300,000 

Under $1200 11,000.000 

12.500,000 

c. The facts stated in "Hull House Maps and 
Papers,"- where many families are represented as 
getting less than five dollars per week for a family 
of about five persons. 

3. Find what per cent the expenditure under each head is 
of the total, and compare it with the following statistics 
for the United States and for Europe:^ 

'Spahr, An Essay on the Present Distribution of Wealth in the 
United States, p. 128—1896, T. Y. Crowell & Co., New York. 

21895, T. Y. Crowell & Co., New York. 

'Bullock, Introduction to the Study of Economics, pp. 100, 101 — 
1897, Silver, Burdett & Co., Boston. 



CONCLUSION 



43 



UNITED STATES 



Object of 
expsnditukb. 



Income 
under 

$200. 



Per cent. 



Income 

$300 

and under 

$400. 



Per cent. 



Income 

$500 

and under 



Per cent. 



Income 

$700 

and under 



Income 

$900 

and under 



Per cent. 



Income 

$1200 
and over. 



Per cent. 



Rent , 

Fuel 

Lighting 

Clothing 

Food 

All other pur- ) 
poses ) 



15.48 

7.07 

1.01 

12.83 

49.64 

13.98 



14.98 

6.04 

.98 

14.14 

45.59 

18.27 



15.15 

5.63 

.97 

15.27 

43.84 

19.14 



15.60 

4.42 

.88 

16.33 

38.89 

23.88 



14.96 

4.00 

.74 

16.84 

34.34 

39.12 



12.59 

2.57 

.45 

15.71 

28.63 

40.05 



EUROPE 



Object of 
expknditurk. 


Income 
under 
$200. 


Income 

$300 
and under 

$400. 


Income 

1500 

and under 

$600. 


Income 

$700 

and under 

$800. 


Income 

$900 

and under 

$1000. 




Per cent. 


Per cent. 


Per cent. 


Per cent. 


Per cent. 


Rent 


9.38 

5.38 

1.66 

19.08 

48.32 
16.18 


11.93 

5.49 

1.59 

14.18 

49.58 

17.23 


10.26 
3.32 
1.37 

15.21 

50.06 
19.78 


9.49 

3.97 

1.20 

18.97 

44.00 

32.37 


10.49 


Fuel 


5.19 


Lighting 


1.53 


Clothing 


14.15 


Food 


46.24 


All other purposes 


22.40 



[Note. — Statistics like the above may be made much more 
interesting and useful to the class if several persons, perhaps 
all members of the class, make graphic statements of them 
after their own plans on ruled note-paper. 

CONCLUSIOIS" 

Thus far the observation and thought of the student have 
been primarily directed to the various forms of human activity 
that are all about him rather than to printed accounts of these 
activities.] 

Human wants, ranging from the lowest physical to the 
highest spiritual ones, have been pointed out as the stimuli of 
human effort. 

That quality in matter which tends to satisfy any human 



44 INDUSTRIAL OBSERVATION 

want, whether furnished directly by nature, or by nature 
aided by man, has been called utility. 

Goods possessing utility have been grouped into two great 
classes, services and wealth. 

From an economic point of view, the great majority of men 
and women have been seen coming out of an apparent chaos of 
occupations, to take definite and orderly places in a great 
industrial organization whose perpetual activity, from extractor 
to servant, results in never-ending and reciprocal streams of 
utility for the partial satisfaction of their multiplying wants. 
From these great streams of utility in the forms of service and 
wealth, the non-producers as well as the producers take ; but 
to these streams, only the producers give in return. Parasi- 
tism is not confined to the vegetable world. At the best, a 
producer is usually served by a larger army than the one to 
whom his product flows. 

"If a cross section showing a single day in the life of a civil- 
ized man could be exposed, it would disclose the services of a 
multitude of helpers. When he rises, a sponge is placed in 
his hand by a Pacific Islander, a cake of soap by a Frenchman, 
a rough towel by a Turk. His merino underwear he takes 
from the hand of a Spaniard, his linen from a Belfast manu- 
facturer, his outer garments from a Birmingham weaver, his 
scarf from a French silk grower, his shoes from a Brazilian 
grazier. At breakfast his cup of coffee is poured by natives 
of Java and Arabia; his rolls are passed by a Kansas farmer, 
his beefsteak by a Texan ranchman, his orange by a Florida 
negro. He is taken to tne city by descendants of James Watt ; 
his messages are carried hither and thither by Edison, the 
grandson by electrical consanguinity of Benjamin Franklin; 
his day's stint of work is done for him by a thousand Irishmen 
in his factory; or he pleads in a court which was founded by 
ancient Romans, and for the support of which all citizens are 
taxed ; or in his study at home he reads books composed by 
English historians and French scientists, and which were 
printed by the typographical descendants of Gutenberg. In 
the evening he is entertained by German singers who repeat 
the myths of Norsemen, or by a company of actors who 
render the plays of Shakespeare; and, finally, he is put to bed 
by South Americans who bring hair, by Pennsylvania miners 



CONCLUSION 45 

and furnace workers who bring steel, by Mississippi planters 
who bring cotton, or, if he prefers, by Russian peasants, who 
bring flax, and by Labrador fowlers who smooth his pillow. 
A million men, women, and children have been working for 
him that he may have his day of comfort and pleasure. In 
return he has contributed his mite to add a unit to the com- 
mon stock of necessaries and luxuries from which the world 
draws. Each is working for all; all are working for each."^ 

The fundamental importance of the right of private prop- 
erty in many things has been emphasized by suggesting that 
the exercise of this right is the foundation on which the 
present organization of industry rests. 

The universality of business bargains, or agreements, called 
contracts, as a means of determining the economic relations of 
men to each other, has also been clearly suggested. 

The following economic groups of people have been identi- 
fied and are all found in most communities : 

1. Extractors. 

2. Transformers. 

3. Transporters. 

4. Transferrers. 
6. Servants. 

6. Dependents. 
Also, in each concrete business enterprise within the first five 
groups, the following factors have, as a rule, been found requi- 
site to the production of utility. 



I. The primary factors 
(historically considered). 



1. Man. 



2. Natural resources. 



II. The secondary factor i 
(derived from land, or natural re- •< 3. Capital, 
sources, by man's previous effort) . ( 

^Harris, 3Ioral Evolution, pp. 36, 37—1896, Houghton, Mifflin 
& Co., Boston. For a masterly description of the process of con- 
temporary production, compare Taussig, Wages and Capital, ch. i 
—1896, D. Appleton & Co., New York. 



46 INDUSTRIAL OBSERVATION 

The persons who furnish these factors to productive enter- 
prises have been called : 

1. Undertakers. 

2. Laborers. 

3. Capitalists. 

4. Landlords. 

The suggestion has been made that individual productive 
enterprises, most of the methods by which different persons 
are getting a living, are more or less modified by the will of 
society as this will is shown in fashion, custom, usage, and 
law. 

With these economic facts and their interrelations, as the 
student has seen them and thought about them in connection 
with actual industrial processes, as clearly in mind as possible, 
Part II may now be read. The six-fold grouping which has 
become so familiar, the persons who furnish the factors in 
production, society, and the ideas of ownership and contract, 
will be used as general heads under which to group some of 
the most significant facts of more than eight hundred years of 
industrial history. The main qaesfcion to be answered is, How 
have successive periods of the life of man, in England and the 
United States, differed from our own period in respect to 
these economic gi'oups, in respect to the factors of production, 
and in respect to their ideas and practices concerning private 
property and contract? How has the industrial life of pre- 
vious periods differed from the industrial life of the present? 



PART II 

OUTLINES OF THE INDUSTKIAL HISTOEY OF 

ENGLAND AND THE UNITED STATES 



Chapter I 

THE HOME, OR FAMILY, PERIOD OF INDUSTRY IN ENGLAND 

Since the Conquest, there have been, in Ensr- 

Introduotion . , , • -, a • ■, • 

withsuggest- land, four great periods of industry so dmerent 
from each other that they have been given dis- 
tinct names. These are; The Home, or Family, Period; the 
Gild Period; the Domestic Period; and the Factory Period.^ 
The transforming group of occupations is the one whose pecul- 
iarities of organization at different times have suggested the 
above names. 

A chapter will be devoted to the chief characteristics of 
industry as a whole, in each period. 

1. Find out as much as you can about the industrial life of 
the time when the old people you know were children, and of 
the time when their parents were children. For example, 
get answers to as many questions similai* to the following as 
possible : 

a. What kinds of crops were raised on the farms, and 
with what tools? 

b. How much of the harvest was used at home, and 
how was the rest disposed of? 

c. Who made the cloth and the shoes used in the 

^Ashley, An Introduction to English Economic History and 
Theory, vol. II, pp. 219, 320— 2d ed., 1893, G. P. Putnam's Sons, 
New York. 

47 



48 OUTLINES OF INDUSTRIAL HISTORY 

family? With what tools? Who furnished the 
materials? 

d. How were the persons paid who did this work? 

e. What journeys were taken? How did people travel? 
What were some of the probable events of these 
journeys? 

/. What kinds of money were used? Was it conven- 
ient? Why? 
g. How were letters, packages, and heavy goods sent 

to distant persons and places? At what cost? 
h. What kinds of goods were sent long distances? 

Why? 
i. How were people amused, taught, preached to, 

and taken care of when sick? 
j. What were some of the largest business enterprises 

of the locality? 
k. What prospects did young men have of "setting up 

in business" for themselves, becoming their own 

undertakers? 
l. What capital was needed? 

m. Why were boys apprenticed, and how was it done? 
n. Were men who worked for wages thought by their 

employers to be inferior socially? Why? 
0. What were the occupations of young women? 

Wliy? 
p. Make a list of services that we can buy now that 

could not be bought then. 
q. Make a list of potential utilities, forms of wealth, 

that we use commonlj which were then unknown. 

2. Write a sketch (partly imaginary) of the life of your 
great-grandfather, describing his food, clothing, shelter, edu- 
cation, travels, amusements, occupations, etc. 

3. Imagine your great-grandmother a guest in your home 
for a day or a week, and wi'ite a sketch of her experiences in 
the midst of your industrial life of production and consump- 
tion of utilities. 



THE HOME PERIOD IN ENGLAND 49 

4. Make a brief statement which shows as clearly as possible 
the great contrast between the industrial life of to-day and 
that of one hundred years ago. 

When William the Conqueror (1066-1087) 

Manors and ' 

Towns in Eng- took a census of the population of England, in 

land in 1086. , , ^ -, i , . 

1806, m order to find out who his taxpayers 
were and how much his tax collectors ought to collect 
from them, it was found that about ninety per cent of the 
one and one-half million people^ were connected with the occu- 
pation of agriculture upon the various manors that dotted the 
otherwise wooded and waste surface of England. About 
eighty of these manors,^ in addition to their agricultural popu- 
lation, included enough other people so that they can accurately 
be described as towns. Not more than one-tenth of the 
population, however, were found in these overgrown manors 
which were fortified and called towns. If, therefore, we can 
get some definite idea of a typical manor of the time we have 
only to enlarge the picture and add some details to give an 
idea of the town also. 

If an observer were upon the top of some high 

Bird'g-Eye . ^ . 

View of a hill, lookiug down upon an old English manor. 

Manor.' *^ ^ . . , . 

he would see one straight street with little 
houses on each side and a larger house at one end or 
near by. Stretching away from this little village would lie 
ploughed fields, each divided into acre, or half-acre, strips, 
usually forty rods long, by four, or two, rods wide, and sepa- 
rated from each other by an unploughed "balk" of green turf. 
All of the strips in one field extend in the same direction and 
lie side by side, but the strips in adjoining and distant fields 
lie at all angles with the strips of the first field, and the differ- 
ent fields are separated from each other by broader "balks" of 
turf that are usually all overgrown Avith bushes. The whole 

^Seebohm, The English Village Community, pp. 86, 87, map — 3d 
ed., 1884, Longmans, Green, & Co., New York. 
^Ashley, vol. I, pp. 68, 69. 
^The same, vol. I, pp. 6, 7. Compare Seebohm, pp. 1-29. 



50 OUTLINES OF INDUSTRIAL HISTORY 

arable surface of the manor, therefore, divided thus into thou- 
sands of ploughed strips grouped into separate unfenced fields 
at all angles about the village street, looks somewhat like a huge 
"spider's web." Beyond the ploughed land, or along the 
banks of a stream, if one flows through the manor, are grass 
lands for the hay harvest; further out still is the common 
pasture for the village cattle; and beyond all else is the forest, 
into which the swine are driven to feed upon the roots and 
nuts, and which stretches far and dark and isolating toward 
other manors that lie scattered here and there in the immense 
waste of moor, fen, and wood which make up the England 
of King William's time. 

Now the explanation of this bird's-eye view of 

^Explanation ... , ,. ,. ., 

of a manor lies m the relation of its inhabitants 

to each other and to the soil. The little cot- 
tages along the two sides of the straight street are the 
homes of the tenants, while the larger house near one 
end of the street is the manor house in which the lord of the 
manor, or his representative, lives. The numerous fields of 
long and narrow acre, or half-acre, strips, are the cultivated 
land which is divided among the tenants and the lord in a 
curious way. For example, if the names of the tenants are 

A, B, C, D, E, F, etc., the strips of each field belong to A, 

B, C, D, E, F, etc. ; but often not more than one strip in a 
place belongs to the same tenant. The lord also, in addition to 
the solid acreage of land about the manor house, often holds 
single strips of land scattered over all the various fields of the 
manor, side by side with the strips of his tenants. The grass 
land by the riverside is also divided into as many plots as 
there are tenants. The pasture and forest on the outside of 
the ploughed land are used, as a rule, by lord and tenants in 
common, and are not divided. The lord's lands are called the 
"demesne lands," and the ploughed fields with their strips 
running in all directions are the "open fields." 

^Authority for the historical statements of this chapter, unless 
otherwise stated, may be found in Seebohm and Ashley, 



THE HOME PERIOD IN ENGLAND 51 

The farmers of this day were not very fa- 

The Method ., . . , , , , »/,.,.,• » , i i 

of miliar with the art of fertinzation of the soil 

Cultivation.! -, n ^ n • <• • u i 

and, of course, knew nothing of agricultural 
chemistry, so they used to let their fields rest — "lie fallow," 
a part of the time. Sometimes they let a field lie fallow 
one year and cultivated it the next, which gave them 
the use of only half the ploughed land each year. This 
was the "two field system." Again, they sowed a field for 
two years in succession and let it rest the third, thus having 
in use each year two-thirds of all the ploughed land. This 
was called the "three field system." 

By either system the land was not economically used and no 
man could cultivate his strips in a different way from that of 
his neighbors. The whole community was bound in the 
bonds of a common method of agriculture. No ambitious 
tenant could, without the consent of his neighbors, improve 
the crop and method of cultivation of his particular strips, 
because the cattle were allowed to graze over all the arable 
land of the manor that was lying fallow, and even upon the 
rest of it in the autumn, after the harvest had been gathered. 
The careless farmer was able, by virtue of his scattered hold- 
ings, to sow the fields of the whole manor, including those of 
the lord, with seeds of noxious weeds ; and the quarrelsome 
man was able, by virtue of the same peculiarity of holding 
land, to keep up a perpetual dispute with many neighbors over 
real or alleged encroachment upon the turf divisions between 
holdings, about right of way along the headlands, and about 
paths made through the growing grain. 

The origin of this scattered strip system of holding and 
Avorking land is variously explained, but probably was due to the 
fact that once the lands of the community were periodically, 
perhaps annually, assigned to the individual members, each 
person getting strips in all parts of the cultivated area, in order 
to give to all the benefits of each specially fertile section. 

^Cunningham and McArthur, Outlines of English Industrial 
History, pp. 173- 174— 1895, The Macmillan Co., New York, 



62 OUTLINES OF INDUSTRIAL HISTORY 

When the periodical assignment was given up and the same 
strips were occupied year after year by the same man, and 
perhaps by his son after him, the land of each man became 
permanently but definitely scattered. Whatever the origin, 
this was the universal system of landholding at the time of 
Domesday Survey; and, what is still more remarkable, the 
system was not wholly given up until the nineteenth century 
was well begun. 

Although there were various classes of ten- 

Clasges . . 

of ants upon these manors ranging from men 

Tenants.! , ^ , , ■.■,-, 

who were nearly freemen m the modern sense 
of the word, to others who were little more than slaves; 
the most numerous class was composed of "villeins" who 
were about midway between slavery and real freedom. Most 
of the tenants who were the nearest free were upon the 
manors in the Danish counties of northeastern England. The 
names "socmen" and "freemen" were often applied to them. 
Most of the "servi," or slaves, were found in the southwestern 
manors. There were also many "bordars," or "cotters," who 
held less land than the villein on similar conditions. 

The typical villein held fifteen or thirty acres of ploughed 
land, called a half-virgate or a virgate, scattered as we have 
seen in strips all over the manor. He also had a little cottage, 
usually Avith a garden, on the village street; an allotment of 
grass land sufficient to cut hay enough to feed his cattle 
during the winter ; the right to pasture a certain number of 
cattle upon the common pasture during the summer ; and the 
right finally to let his swine feed in the surrounding forest, 
from which he could also collect the necessary firewood. 
The Conditions ^- ^^^^ '"'' Heviot.'' ' — It will be remembered that 
"P«n^^/M<='» William I. was a feudal monarch, and after 

tlie Villein ' 

Held His Land. ^\^q Couquest claimed jurisdiction over all the 
land of England. Some of it, although containing manors 
and towns, he laid waste to make for himself a mighty 

iVinogradoflf, Villeinage in England, pp. 132, 177, 220—1892, The 
Clarendon Press, London. 



THE HOME PERIOD IN ENGLAND 53 

hunting ground; some of its manors he cultivated him- 
self after the methods of that day; while other manors 
were allotted to his followers, one or more to each per- 
son, on condition of their giving him military service 
and other payments in return. The inhabitants of each 
manor were in turn expected to render the lord of the 
manor certain services and make certain payments, in return 
for protection and the right to cultivate their various hold- 
ings. The most important person connected with each 
manor, therefore, was the lord, whether this was the king 
himself, as in the case of the 1,422 manors held directly by 
William in 1086, or some follower of the king as upon other 
manors. 

The villein, therefore, was not the full owner of his land, 
but held it upon a grant from the lord of the manor, some- 
times for life and sometimes for a term of years, in accordance 
with the custom of the manor for that particular holding. 
When this gTant expired the title reverted to the lord, who 
could, in theory perhaps, regrant it to whom he would. In 
practice, however, the holding was usually regranted undivided 
to the tenant himself, and, when he died, to his eldest son. 
This regrant was usually conditioned upon the payment to the 
lord of a "heriot," or "relief," consisting of an ox, the 
money value of the same, or some other similar payment. 

It will be observed that this payment, which was of the 
nature of an inheritance tax, did not give the villein power to 
sublet his holding without the lord's permission, much less to 
dispose of it absolutely by gift, by sale, or by bequest. What 
the villein obtained was simply the right to make use of land 
in his own person. 

l. Weehly Worh: "■Precarm,"''' or '■'■Boon-days'''': Payments 
in Kind or in Money. — The following minute record of the 
services of two villeins in the thirteenth century is given 
by Mr. Seebohm, and quoted here in full in order to show 
how detailed the duties of a villein were.^ 

»pp. 43, 43. 



54 



OUTLINES OF INDUSTRIAL HISTORY 



EXAMPLES OF VILLEIN SERVICES 



Oxfordshire 

Of a villanus holding a 
virgate. 

A. B. holds a virgate and 
owes — 

82 days' work (about 3 
days a week) between 
Michaelmas and June s. d. 
24, valued at 3^d.= ... 3 5 

113^ days' work (rather 
more than 2 days a 
week) between June 
24 and August 1, val- 
ued at Id. = IIM 

19 days' work (23^ days 
a week) between Au- 
gust 1 and Michaelmas, 
valued at lKd.= 2 4K 

6 precariae, with one 
man, valued at 12 

1 precaria, with 2 men, 
for reaping, with food 
from the lord, valued 
at 2 

Half a carriage for car- 
rying the wheat 1 

Half a carriage for the 
hay I 

The ploughing and har- 
rowing of an acre 6 

1 ploughing called "gro- 
serthe" 1}4 

1 day's harrowing of oat 
(land) 1 

1 horse (load) of wood... X 

Making one quarter of 
malt and drying it 1 

1 day's work at washing 
and shearing sheep, 
valued at K 

1 day's hoeing X 



Huntingdonshire 

Of a villanus holding a virgate. 

A. B. holds 1 virgate in villeinage — 

By paying 12d. at Michaelmas. 

By doing works from Michaelmas 
to Easter with the exception of 
the fortnight after Christmas, 
viz., 2 days each week, with 
one man each day. 

Item, he shall plough with his 
own plough one selion and a 
half on every Friday in the 
aforesaid time. 

Item, he shall liarrow the same 
day as much as he has ploughed. 

He shall do works from Easter to 
Pentecost 2 days each week, 
with one man each day. 

And he shall plough one selion 
each Friday in the same time. 

He shall do works from Pentecost 
till August 1, for three days 
each week with one man each 
day, either hoeing the corn, or 
mowing and lifting (levand). 

He shall do works from August 1 
till September 8, for 3 days each 
week, with two men each day. 

He shall make one "love bonum" 
with all his family except his 
wife, finding his own food, and 
from September 8 to Michael- 
mas he works 3 days each week 
with one man each day. 

He shall carry (with a horse or 
horses) as far as Bolnhurst, and 
from Bolnhurst to Torneye. 

Also he gives M bushel of corn as 
"bensed" in winter time. 

Also 10 bushels of oats at Martin- 
mas as "fodder-korn." 



THE HOME PERIOD IN ENGLAND 



55 



s. d 

3 days' mowing 6 

1 day's nutting 

1 day's work in carrying 

to the stack 

Tallage once a year at 

the lord's will. 



Also7d. as "loksilver," that is for 
2d. a loaf and 5 hens. 
3^ Also Id. on Ash Wednesday, as 

"fispeni" (fishpenny). 
}4 Also 20 eggs at Easter. 

Also 10 eggs on St. Botolph's Day 
(June 17). 

Also in Easter week 2d. towards 
digging the vineyard. 

Also in Pentecost week Id. 
towards upholding the milldam 
(stagnum) of Newstone. 

If he sell a bull calf he shall give 
the lord abbot 4d. and this ac- 
cording to custom. 

He gives "merchetum" and "heri- 
etum" and is tallaged at 
Michaelmas according to the 
will of the said abbot. 

He gives 2d. as "sumewode silver" 
at Christmas. 

The viuein ^^ ^^® foregoing account of villeins' services 
a Serf. ^nd payments to their lords be typical, as 
there is no doubt they are, it can be seen at once how 
servile their position was. Obliged to make a payment 
in order to come into possession of a virgate or half- 
virgate to begin with, the villein was henceforth unable to 
leave the manor, to sell an animal, or to give his daughter 
in marriage, without gaining the consent of his lord, and, 
usually, paying some fine. After devoting from two to 
three or more days per week throughout the year, and extra 
days, sometimes with an extra man or two, at harvest and other 
times of extra need, to the service of his lord, the time that 
was left could be given to the cultivation of his own virgate 
in order to gain his own subsistence and the wherewithal to 
pay the further taxes due the lord by custom or exacted at 
his caprice. Such was the typical condition of the vil- 
leins mentioned in the Domesday Survey of William the 
Conqueror. 



56 OUTLINES OF INDUSTRIAL HISTORY 

It has already been stated that the king at 

The Seneschal ,, ,. » , ^ , i -,- , i n , 

or the time of the biirvey was the direct lord of 

many manors; and that in certain other cases 
several manors were granted to one person. In these cases, 
of course, the lord could not give adequate personal super- 
intendence to all his estate, especially as it was the policy 
of the Conqueror to give to one man the lordship of manors 
in different parts of England, rather than in a group. 
Therefore, the services of a general superintendent of several 
manors was performed for the lord by a "seneschal" or 
"steward." It was his duty to settle all questions of rents, 
services, markets, seed for the different manors, etc. He per- 
formed these duties, partly by overseeing the work of the lord's 
agent on each manor, and partly by holding the manorial courts. 

The local agent of the lord for each manor 
and was the "bailiff" who was to look after the lord's 

interest in every detail; for example, he was to 
see to it that the villein put in a good day's work, worked the 
required number of days weekly, and gave his boon-day service at 
the right time. He inspected the woods, pastures, and fields, 
and directed in detail all the work on the lord's demesne. 

Under the bailiff was the "praepositus" or "reeve," who was 
elected by the other tenants and who saw to it in general that 
the villeins did their customary work well. It must be sup- 
posed also that he, to a certain extent, took the part of the 
tenants if there was danger of their being unjustly treated. 

Thus, under the eyes of the lord's trusted men, the 
villeins joined their oxen for ploughing the scattered strips of 
the lord's demesne; sowed, cultivated, and harvested the 
lord's grain; cut his hay from the common meadow; and 
hauled firewood from the forest to the manor house. 

Not only was the extractive group of occupa- 

dnstr^s'Ifther tious of moro industrial importance than all the 

'^cuitur^^^' other occupations of the time; but agriculture, 

according to the methods described, was the most 
important of the extractive industries. Even the inhabit- 



THE HOME PERIOD IN ENGLAND 57 

ants of the largest towns were many of them holders 
and cultivators of scattered strips of land outside the town 
walls. ^ At first many townsmen even gave weekly and hoon- 
day labor on the lord's demesne lands in return for their own 
holdings, since every town belonged to some lord's estate just 
as if it were only a manor. 

In comparison with agriculture, therefore, the other extract- 
ive industries amounted to little. Some tin was mined in 
Cornwall and the Scilly Isles, a little lead in Derbyshire; 
and coal was picked up in many places. Such primitive 
methods prevailed that man was practically helpless in his 
attempts to assault the mineral stores of the island. Of 
course, many persons fished a little, some hunted, and every- 
body secured firewood and rude timbers from the extensive and 
isolating forests about them. 

The tenants of a manor built their own rude 

Transforming . 

upon the dwellings, dried the skins of their slaughtered 

Manor. .,»■,. -, , 

animals for their own use, and wove rough 
linen and woolen cloth from which they made their own 
simple clothes. There was also a smith who kept the 
ironwork of the village ploughs in order, and a carpenter 
who made and repaired the woodwork of ploughs, harrows, 
etc. These men were themselves often tenant farmers who 
were excused from a part of their labor for the lord, in return 
for their services as artisans. When several manors were close 
together a smith and a carpenter, working now in one manor 
and now in another, were sometimes kept wholly at transform- 
ing work, and thus were distinct from the extractive class of 
workers. As a rule, however, the transforming work of a 
manor was done by the extractors. Extracting and transform- 
ing were not yet, as a rule, distinct occupations. There was 
practically no manufacture for consumption outside the 
manor. 



^Gomme, Tlie Village Community, p. 226 — 1890, Scribner & 
"Welford, New York. 



58 OUTLINES OF INDUSTRIAL HISTORY 

Transformers ^^ towna grew larger, and needed manufac- 
in tured articles requiring more skill than a 

Towns.> person occupied most of the time with other 
tasks could acquire, distinct artisan classes with superior 
tools grew up in the town to make such articles. Probably 
the first transforming industry to enlist in its services 
the whole time of a separate class of men was that of 
weaving. Cloth was "a necessary," but a necessary which 
would "keep." So this industry grew as town populations 
gi'ew, and many other industries likewise, and gradually 
absorbed to themselves the whole time of larger and larger 
numbers of men. Among industries mentioned by Ashley are 
those of butchers, bakers, bricklayers, cordwainers, dyers, 
fullers, saddlers, helmet-makers, spurriers, plumbers, etc. In 
towns, therefore, there was already a distinct and growing 
group of transformers ; although it must be supposed that in 
the town, as well as upon the manor, most of the manu- 
factured goods required by each household were still made 
by its own members. 

With the exception of couriers, messengers, etc.. 

Transporters. ^ . . 

this group of men was not yet distinct from 
extractors and transformers on one side, or from transferrers on 
the other. About the only commodities that were carried out of 
a manor were the agricultural products which were drawn and 
carried by tenants themselves to the nearest market town, to a 
fair, or to some other manor house where their lord and his 
retinue were for a brief time staying. On the other hand, the 
goods that were brought into towns and manors were chiefly a 
few articles of luxury from abroad, articles that were not bulky, 
but valuable. 

The only vehicles were rude and heavy wagons for 
merchandise. Men and women went on foot or on horse- 
back. With the exception of some old Koman roads which 
still remained, the highways were wretched and growing 
worse. 

'Ashley, vol. II, ch. i. 



THE HOME PERIOD IN ENGLAND 59 

„ ^ The first ffroup of occupations, aside from the 

Transferrers. » o j. r i 

military, to become wholly separate from agri- 
culture, was probably a class of small traders in raw products 
of agriculture, and imported articles of luxury. After the 
Conquest this foreign trade, largely in the hands of men from 
outside England, grew in importance and was carried on 
mostly in the market places of towns and at periodical fairs. It 
was necessary to gain the king's consent for a town to have a 
market and for the holding of all fairs. Money was scarce, 
and most exchanges, especially the local exchanges, were of 
goods for goods (barter) at rates that were largely ruled by 
custom. 

As both local and foreign trade grew, a town got 
permission from the king to form an organization of 
privileged men called a "Gild Merchant," to control the 
minutest details of the qualities and quantities of goods 
exchanged. "Within a century and a half after the Con- 
quest practically every town of importance had secured the 
privilege of thus controlling its own trade by means of its Gild 
Merchant. 

rvant "^^^ ^°^'^ ^^ ^ manor, the king, and the neces- 
sary retainers of both, in this feudal time when 
an armed force was needed for offense and defense, performed 
genuine services for the manorial tenantry in return for the 
servile and oftentimes excessive labor and contributions rendered 
to their lords by the tenants. Courts were also held by the 
lords, or their representatives, upon every manor. 

Sometimes, also, the lord of a manor was not a military or 
political person, but a church dignitary, and thus rendered a 
religious service to his tenantry. In addition, there was upon 
each manor, as a rule, a village priest who often united in him- 
self the functions of farmer, teacher, and preacher. In 
general, clergymen were lawyers, teachers, architects, and men 
of letters. 

^Gross, The Gild Merchant, vol. 1—1890, The Clarendon Press, 
London. 



60 OUTLINES OF INDUSTRIAL HISTORY 

Of course, there were also personal and domestic servants in 
the service of the well-to-do. 

Two facts should be emphasized: the servant group of occu- 
pations was not so separate from other groups as now, since 
each man did a greater variety of kinds of work ; services of 
all sorts were not, as a rule, paid for in money, but in other 
services or material goods. Much of the income, even of 
the clergy, lords, and kings, was in the form of services 
and produce rather than in money. The feudal system 
as a whole Avas based more upon the idea of an exchange of 
services than of wealth. 
^ ^ , The fact that all the land and all the persons 

Dependents.^ '^ 

upon all the land were a part of the estate of 
some lord, fixed the responsibility for caring for all unfortunate 
and inefficient persons. With the possible exception of the 
useless hangers-on of the powerful, and of the begging friars 
who entered England early in the thirteenth century, there 
were no homeless poor in England. Each manorial estate was 
supposed to take care of all its own dependents. 

So iet ' ^^^ dominant idea upon manor and in town was 

what we call feudalism. There were graded 
rights to the soil ; and graded duties corresponded with those 
rights. Every person, therefore, had well-defined rights and 
duties in relation both to those persons higher in the scale and 
to those lower. Looking at society from the point of view of 
the king, it is clear that from the humblest tenant who gave 
days of service and a few eggs to the lord of the manor, up 

'Gamier, History of the English Landed Interest, vol. I, p. 245 — 
1892, Swan, Sonnenschein, & Co., London. 
^In Part I we used the formula — 

Society + man j ^ rrfofefworker \ + -P'" 

+ natural resources = utility 
to summarize the so-called "factors" that are present in every pro- 
ductive enterprise. The terms of this formula will be here used to 
summarize some of the facts of productive enterprises of England 
during the Home Period. 



THE HOME PERIOD IN ENGLAND 61 

through the villeins, socmen, lords, abbots, and over -lords, an 
increasing stream of revenue was flowing toward the king as 
the official head of the political and military society of Eng- 
land. The king also gained much revenue from the great 
number of royal manors of which he was the direct lord. 

Through taxation by feudal methods, therefore, the pro- 
ductive processes of individuals, then as well as now, were 
affected by society organized for purposes of government. 

Another way in which the king, in the name of all the peo- 
ple, affected industry, was in partially controlling the coinage 
of money. Henry I. (1100-1135) found, in 1125, that ninety- 
fom* "moneyers" who had been allowed to coin money had 
clipped the coins. As a punishment he ordered their bodies 
to be likewise mutilated. 

A third important power of society was the minute control 
of trade and transportation by the Merchant Gilds of towns to 
which the king had granted this privilege. The right to hold 
fairs was also bought from the kiag. 

Towns similarly bought from their lords the right to pay a 
town tax instead of giving individual services, the right to 
govern themselves, and the right to hold courts. Thus men 
in groups to whom we give the name society, through their 
political and military organization as a nation, through their 
town organizations, and through their industrial gilds, were 
continually making rules and conditions under which the indi- 
vidual producer of utility was obliged to carry on his enterprise. 

^ ^, ^ Political economists mean by "land," not only 

liandlords. •' . 

land in the literal sense, but also lakes, rivers, 
mines, forests — all kinds of materials and forces whatsoever 
that are furnished directly by nature. We shall often use 
the word land in this broad sense hereafter. 

The king was the greatest landowner in England.-^ Indeed, 
in theory, he was the only man who had the full right of 
private property in land, — right to use in his own person, right 

' Medley, A Student's Manual of Constitutional History, p. 20 — 
1894, Simkins, Marshall, Hamilton, Kent, & Co., London. 



62 OUTLINES OF INDUSTRIAL HISTORY 

to let out and enjoy the fruits of, and right to dispose of. 
Other men, down to the villein who had simply the right to 
use, had partial rights of property. Slaves, of course, did not 
have even this partial ownership. Still, one of the most 
significant things about the time was that nearly everybody 
had at least the right to use for a definite period a definite 
amount of land. Nearly everybody was in a limited sense his 
own landlord. 

The term "capital" as used hereafter is intended 

Capitalists.' . 

to include both money and all goods not designed 
by the owner for the immediate satisfaction of his wants, but 
for use in further production, that is, all "tangible apparatus 
for the production of wealth."^ The term includes also "all 
the goods still in the stage preparatory to final enjoyment." 

In a certain sense, of course, any man who has even a little 
capital is a capitalist, but generally a capitalist means a man 
who has a considerable quantity of capital, usually enough to 
lend to others. 

In this sense there were comparatively few capitalists in 
England. The workmen in the different occupations, of 
course, had simple tools belonging either to themselves, to the 
lord of the manor, or, in towns, sometimes to the master 
workman. Still no great outlay was necessary for tools in 
any particular case. Skill in their use was more important 
in setting up a business than the tools themselves. The labor 
factor in production was of more importance than the capital 
factor. 
Man as Under- ^y "undertaker" is meant the man who sees 
taker. ^\^q^^ somc utility is desired by men and under- 
takes the task of producing it. Here again every case of 
production has its undertaker ; but there are cases varying all 
the way from the one where no special acuteness is required to 
see what kind of utility will meet the wants of men, to the 

^ See Part III, chapter ii, for brief discussion of the nature of 
capital. 
» Taussig, pp. 36, 37. 



THE HOME PERIOD IN ENGLAND 63 

one where a man must foresee, months in advance, what par- 
ticular textures and patterns of fabrics fashion will make 
popular among millions of people. Cases vary also from a 
simple productive process where the undertaker himself can 
with his own hands use the necessary tools upon simple 
materials, to the case where the cooperation of thousands of 
laborers, millions of dollars' worth of capital, and other 
millions of dollars' worth of land must be secured. Only 
when the productiA'c process has become so complex that 
special acuteness in planning a business and special skill in 
the cooperation of land, labor, and capital to carry it on suc- 
cessfully, are required, is there a class of people developed to 
do just this work. 

During the Home Period of industry, production was simple 
and carried on in customary ways. The undertaker, there- 
fore, does not stand out separate from ordinary workmen or 
from owners of land. 
Man as Direct- ^P^^ ^^6 mauors the tcuauts workcd in two 

ed Worker, capacities: as directed workers upon the lord's 
demesne lands ; and as independent workers, men who were 
their own undertakers, upon their own holdings. There were 
also beginnings of wage work in the modern sense. For 
example, when the villein was obliged to work for the lord 
with one or two men, there was something similar to our 
wage-work, although at first, no doubt, the cotter who worked 
for the villein in this way was paid partly in produce or 
reciprocal labor; and, besides, he was usually a small farmer on 
his own account, and thus not wholly dependent upon wages. 
In towns, as soon as a sufficient number of men were em- 
ployed in one kind of manufacture to make it possible, a craft 
gild was formed "to secure honest pay for an honest job." 
There were master workmen who were allowed to undertake a 
job, journeymen who had mastered the trade or craft, but had 
not yet set up for themselves, and apprentices who were learners. 
There was no class which must remain a wage earning class all 
their lives. Apprentices expected to be journeymen, and 



64 OUTLINES OF INDUSTRIAL HISTORY 

journeymen, masters; there was no social gulf between 
them, since the members of a gild lived near together. The 
master workman was trader, undertaker, and workman com- 
bined. 
Right of Pri- '^^^^ right of property in land has already been 
In'dFrTJ'rfom nicntioued in the paragraph on "Landlords." 
of Contract, ^g ^q private property in goods other than land, 
there were all degrees, from that of the slave who owned noth- 
ing, up to that of the lords and king, the latter having, in per- 
sonalty, the full right of private property, including human 
beings. It will be remembered that the villeins could not sell 
animals and produce without the lord's permission, and, thus, 
were without the full right of property in personal goods as 
well as in land. 

Just as custom and tradition fixed the terms on which each 
tenant upon a manor held the score or more of scattered 
strips of land that custom had decreed belonged to him to 
work, so almost all questions of service, barter, and exchange 
of goods for money, were ruled by custom and status, to such 
a degree that a free contract about them was well-nigh im- 
possible. Even the king was bound to a wonderful degree 
to maintain the customary relations with his tenants and 
subjects. 

Lack of production for exchange, especially lack 
and Omits of of manufacture for a market ; the fact that each 

the Period. 

man did many things, was a Jack-at-all-trades, 
as we say; and the lack of means of transportation; in short, 
the self-sufficiency of each economic unit, chjiracterized this 
period, to a degree hard to realize now. Each family, each 
manor, each town, each monastery, England itself, produced 
the utilities consumed within the unit. Thus the name Home 
Period of industry suggests its characteristics. 

No precise date can be given for the end of this period and 
the beginning of another. The transition was gradual and 
was never complete for every family and community. To this 
day there are survivals of the system in out-of-the-way places 



THE HOME PERIOD IN ENGLAND 65 

in the United States, Of course, there were more survivals 
in England during the period which followed it. But 
when manufacture and trade had so developed that the fact 
of sale became more important to large gi'oups of persons than 
the fact of production for home consumption, the industry of 
the time was, on the whole, different enough from that already 
described to be given a new name. During the second hun- 
dred years after the Conquest, the change was going on in Eng- 
land somewhat rapidly. This stage of industrial development 
in America is treated later. In order of time it necessarily 
came later than in England and gave way to other systems 
more rapidly. 

1. Give any examples known to you of families in 
^Questions. ^^^ United States who now consume about all 
they produce, and produce all they consume. 

2. Give reasons for this fact. 

3. How do the wealth and services they consume compare, 
in variety and quality, with those of the family of an ordinary 
worker for wages, in a town or city? 

4. Give examples of communities of people in the country 
that are or have been largely self-sufficing. 

5. Give similar examples of nations. 

6. AThat is the present tendency in this particular of such 
families, communities, and nations? Why? 

7. Give examples of prices of goods which are determined 
to some degree by custom. 

8. Give examples of wages which are determined to a great 
degree by custom. 

9. In which field, that of payment for services or for 
material goods, is custom more effective in fixing price? 
Why? 

10. Give the best example known to you of the rapid fluc- 
tuation of the price of something, in response to the conditions 
of the moment — that is, a case where custom has least 
influence upon price. 

11. Is freedom of contract greatest in this case? Why? 



66 OUTLINES OF INDUSTRIAL HISTORY 

12. Point out resemblances between the industrial life of 
one hundred years ago in the United States and that of Eng- 
land during the period already described. 

13. Point out as many differences as possible. 



THE GILD PERIOD IN ENGLAND 67 



Chaptee II 

THE GILD PERIOD OP INDUSTRY IN ENGLAND^ 

Introductory 1- Find out bj reading, or asking some member 
Questions. ^^ ^ labor union, all you can about the member- 
ship, purposes, and methods of modern trade unions. For 
example, ask questions similar to these: 

a. Are men who have different trades, like carpenters 
and bricklayers, members of the same union? Why? 

b. Are owners of land, capitalists, and undertakers, 
members of the same union as wage-workers? Give 
reasons. 

c. May skilled and unskilled workers of the same occu- 
pation be members of the same union? Give ex- 
amples. 

d. How are the local unions of men in the same 
trade — for example, typesetters in different cities — 
united? 

e. In what ways do trade unions seek to affect wages 
and conditions of employment for their members? 

/. What care do labor unions ever take of their mem- 
bers when sick, and of the families of those who 
have died? 

g. Is there, in the United States, any organization 
of the unions of different trades designed to help 

' The authorities which ha^e been most used in writing this chap- 
ter are the volumes of Ashley and Gross, already mentioned, and the 
following: Green (A. S.), Toimi Life in the Fifteenth Century — 
1894, The Macmillan Co., New York; VvTebb and Webb, The History 
of Trade-Unionism — 1894, Longmans, Green, & Co., New York; 
compare also Industrial Democracy — 1897, by the same authors and 
publishers; Ely, The Labor Movement in America — 1888, T. Y. 
Crowell & Co., New York. 



68 OUTLINES OF INDUSTRIAL HISTORY 

all unions in all trades to work together? If so, 
describe it. 
h. What influence do members of trade unions, as a 
rule, have in the government of the town in which 
they live? Give examples. 
i. What are the purposes of trade unions, and by 
M'hat methods do they seek to attain their 
ends? 
j. Is the control of a member by the union as a 
whole, an illustration of the fact that what we 
have called society has much to do with the way 
in which an individual producer of utility carries 
on his enterprise? Which is primarily sought in 
unions, the welfare of a group of men or the 
welfare of one man? Why? 
2. Make a written statement of what you learn about trade 
unions, for comparison with the statements about craft gilds 
in this chapter. 

A Glance ^^ havo gained some suggestions of the sim- 
Forward. pjicity of English industrial life in the period 
just after the Conquest when compared with the life we 
know. This chapter will try to show that during the Gild 
Period some progress was made from the simplicity of the 
Home Period toward the complexity of the Factory Period. 
A knowledge of two facts is of the greatest importance in this 
effort — the Black Death and the growth of towns. The Black 
Death, which carried off about half the population in 1349, 
caused the old agricultural life, as described in the previous 
chapter, to be broken up; and established new business 
relations among the inhabitants of each manor. The fact of 
the growth of towns, on the other hand, is of the greatest 
importance in connection with manufacture and trade. 

For a hundred years or more before the Black 

Extractive In- t-n t -i 

dustries: Death there had been growing up, on some 

AgriciUture. , . . 

manors, the custom of allowing villeins to make 
a payment in produce, or in money, to the lord, instead 



THE GILD PERIOD IN ENGLAND 69 

of giving the customary days of labor upon his demesne 
lands.^ 

In the records of villeins' service in Chapter I it will be 
noticed that the equivalent of every service of the villein in 
Oxfordshire is given in money, while in Huntingdonshire it 
is not so. This is an indication that the custom came in 
slowly. This money payment in lieu of work was called 
"commutation of services," and had a tendency to make the 
servile tenant more nearly like a free man of to-day who 
hires a farm instead of owning one. The lord then took 
these payments, and hired men outright to cultivate his 
demesne. His bailiffs and seneschal could oversee wage- 
workers as well as villeins. The land, however, was still in 
scattered strips. 

After the Black Death the following changes took place : 

1. A scarcity of workers caused wages to rise, in some cases 
as high as fifty per cent, and both the lords upon those 
manors where commutation of services had taken place, and 
the villeins who were obliged to furnish an extra man or two for 
the lords of the manors where commutation of services had 
not taken place, were at once affected thereby. 

2. This great rise in wages caused employers to seek relief 
from Parliament.^ By the Statutes of Laborers, which were 
enacted soon after the Black Death, wage-workers were 
directed under frightful penalties to work for the same rates 
as had before been customary. In spite of these laws, how- 
ever, many employers paid higher wages than formerly. 

3. Those lords upon whose manors commutation had already 
taken place, found themselves, consequently, unable to hire 
men enough, with the payments made by tenants, to cultivate 
the whole of their demesne lands in the old way ; and were, 
therefore, forced either (a) to collect larger payments from 
their tenants ; (b) to give up tillage in the old way and devote 
their demesne lands to the pasturage of sheep, which required a 

^Ashley, vol. I, pp. 20-29. 

"Cunningham and McArthar, pp. 105, 145. 



70 OUTLINES OF INDUSTRIAL HISTORY 

less number of men than tillage ; or (c) to rent their demesnes 
to new tenants, at a higher rent perhaps, but on more favor- 
able terms respecting personal and industrial liberty, than 
were customary with other tenants. 

4, In case more rent was collected from old tenants, there 
was hard feeling and opposition on their part. 

If the demesne lands were turned into sheep pastures, those 
parts that were scattered all over the manor, side by side 
with the strips of tenants, caused trouble, and tenants were 
bought out, ill-treated, and sometimes evicted, in order that 
the whole manor might be enclosed for pasturage. This was 
called "enclosure of the open fields," and resulted in a 
partial depopulation of many manors. And, finally, in case 
new tenants were given more favorable terms than the old, the 
old tenants were jealous of the new. 

In any case, therefore, the old industrial life of the manors 
was so broken up, there were so many causes of hard feeling, 
and so much actual suffering, that the general movement of 
the servile classes toward gi'eater economic and social freedom 
took a violent form, in 1381, in the Peasants' Revolt, or, as it 
is sometimes called, Wat T3^1er's EebeJlion.^ 

5. The immediate result of the revolt was failure, for it was 
put down; and tenants on many manors continued to be 
refused a regrant upon the expiration of an old one, to be 
cheated, bullied, and evicted. Thus were the forests, grass 
lands, demesne lands, and even the open fields held immemo- 
rially by tenants, enclosed to form sheep pastures for the 
lords. For generations this enclosure with depopulation went 
on, until at last Parliament interfered in behalf of the unfortu- 
nate tenants. This legislation took place during the last half 
of the fifteenth century and the first half of the sixteenth. 
After this, therefore, enclosure was for the purpose of so 
redividing the lands of the manor that each tenant could have 
all his laud in one enclosed farm, instead of in scores of scat- 

1 Ashley, vol. II, eh. iv. Compare Medley, p. 38. 



THE GILD PERIOD IN ENGLAND 71 

tered strips.^ This method of enclosure did not of necessity 
reduce the population of a manor. 

6. Although the rural population just after the Black 
Death was too small for the work to be done; after several 
generations had passed, the enclosure of large areas for sheep 
farms gradually made the population too large. As a conse- 
quence, great numbers of men, women, and children, were 
turned from their homes to find work in towns, or to become 
homeless beggars and desperate robbers throughout the land.^ 

7. After enclosure for the purpose of giving each tenant all 
his land in one place had begun, it was possible for the first 
time to begin better methods of farming. The first of these 
better methods is named, in contrast with the old two-field 
and three-field systems, "convertible husbandry." By this 
system, all the tillage land, half in pasture and half under the 
plough, was in use all the time. Each half was periodically 
converted from pasture to ploughed land and from ploughed 
land to pasture.^ 

8. As a result of all these changes upon the manors no 
general description will apply to all of them after the Black 
Death, as it would fairly well before. 

Extractive In- In addition to the simple fishing, hunting, tin 
ciustries^other ^^^ j^^^ mining, mentioned in Chapter I, the 
Agriculture, j^^j^jj^g in(iustry was of growing importance, 
and Englishmen were at last coming to know that the 
coal deposits were of great value.* There were seventy- 
two movable forges for iron in one region ; and forests also 
were in many places used as never before to furnish timber 
for the increasing number of vessels that were being built. 
Still, in comparison with the agriculture of the time, all 
other extractive industries were of little importance. 

lAshley, vol. II, pp. 273, 286, 287. 
«The same, vol. II, pp. 351-356. 

^The same, pp. 261, 262. Compare Cunningham and Mc Arthur, 
pp. 178, 179. 
*Green (A. S.), vol. I, p. 54. 



72 OUTLINES OF INDUSTRIAL HISTORY 

Transformers In a poem of the fourteenth century — The Vis- 
in the Country, ^•q;^ o/ William Concerning Piers the Ploivman^ 
— mention is made of the different classes of villagers who 
turned out into the fields on a spring morning — "a fair felde 
fulof folke." There were "husbandmen, bakers, and brewers; 
butchers, wool-websters, and weavers of linen; tailors, tinkers, 
and tollers in market; masons, dikers, and delvers." 

How many of these persons were so separate from the occu- 
pation of farming as to get their whole living from their 
transforming occupation, it is impossible to say. Indeed, the 
fact that they were all pictured by the poet as being in the 
field implies that many of them were actually helping put in 
the seed. In any event they were so identified with transforming 
tasks that, even if they did work on the land a part of the 
time, they were known in their own village by the name of 
their transforming occupation. This indicates that occupa- 
tions were becoming more separate from each other, 
even upon the manors, than in the days of the Home 
Period. 

Transforming ^^^ ^^® towns also there had come to be as many 
In Towns, different classes of artisans as there were differ- 
ent articles made on English soil. These transforming 
classes in towns had now, as a rule, become wholly separated 
from the occupation of farming, but were still often associ- 
ated closely with the transferring classes. 

Every transforming and transferring occupation which 
enrolled within it a score or so of workers for a single town 
Avas also, during this period, organized into a craft gild. 
Even parish clerks had a gild.^ This gild control of all 
sorts of manufacture and trade by the local gilds of the towns 
suggests the name "Gild Period" which heads this cliapter. 
Something further will be said a little later about the organi- 
zation and purposes of these gilds, under the heading 
"Society." 

^Langland, Prologue. 
"Ashley, vol. II, p. 75. 



THE GILD PERIOD IN ENGLAND 73 

With the same exceptions as durinoj the former 

Transporters. . n , , ^ 

period, transporters do not 3^et seem to have 
become separated from the extractors and transformers on the 
one side, or from transferrers on the other. Certain it is that 
those who were carriers and nothing more, were few, and, in 
comparison with other occupations, of little importance. 

This group of men was seen in Chapter I to 

Transferrers. 

have been the first to become wholly separate 
from the agricultural group in England. It was not there 
seen, however, to become distinct from the transformers, but 
still included many artisans who made the articles they sold. 
During the present period some of the trades became so 
separate from the transformers that they had no hand in 
making goods, but bought them from the makers and resold 
them to others. Not only so, but the trading class became 
more wealthy in many towns than any other class. They 
were the ones who were collecting stores of ready money, and 
theirs were the gilds or "companies," as they came to be called, 
which finally had most influence in the government of the 
various towns. For example, in London in the fifteenth 
century, out of the twelve companies from which alone the 
mayor could be chosen, nine were organizations of transferrers 
rather than transformers.^ 

Again, the foreign trade, especially in wool, was of growing 
importance, and in the thirteenth century began to go through 
certain towns called "Staple Towns" and to fall into the 
hands of certain merchants known as "Merchants of the 
Staple." Of course this gave special privileges to these towns 
and merchants, but by this means the king was in return 
able to collect taxes from the trade more surely and easily.^ 

It would be a great mistake, however, in spite of the facts 
just mentioned, to suppose that the bulk of the trade which 
took place during the period was of this large kind. On the 
contrary, a great part of the trade was still narrowly local. 

'Ashley, vol. II, p. 133. 
^Gross, vol. I, pp. 140-148. 



H OUTLINES OF INDUSTRIAL HISTORY 

Artisans worked very commonly for a purely local market. 
There was, indeed, a market for many kinds of goods outside 
the family and gild of the producers, but it was so well 
known, so local, so steady, that both manufacture and trade 
could in the main be controlled by the petty yet minute and 
definite rules and restrictions of the local craft gild. 

This narrowness of market under gild control characterized 
the period.^ Just so soon as the manufacture and the sale of 
any article were subject to the buyers of the nation as a whole 
and to buyers in foreign nations, the gild regulations made by 
a single English town to control the manufacture and sale 
of that article could no longer be enforced. No longer did 
that industry belong to the Gild Period. 

In this group of occupations, as in most 
of the others in comparison with the period 
of the Family System of industry, there was growing 
separation of tasks. It is of comparatively little impor- 
tance that we are unable in most cases to state just 
how far this class of people depended upon their services, 
and how far upon their efforts as producers of wealth, 
for their subsistence. The really important thing to see is 
that servant functions of the highest order were being per- 
formed to an increasing degree during the period. Langland 
and Chaucer lived and wrote during this time. The uni- 
versities of Oxford and Cambridge were all the while doing 
their part toward general education and the overthrow of 
feudalism, architecture flourished, Caxton set up his printing 
press in England, Wycliffe translated the Bible, Magna 
Charta was wrested from John's reluctant hands, and Parlia- 
ment became the mouthpiece of a liberty-loving people. 

How important the clergy were during that period, and 
how little separated from each other the highest classes of 
servants still were, the following statement admnably shows : 
"The clergy, in the widest sense of the term, contained 
nearly the whole of what we should call the professional 

'Ashley, vol. II, pp. 219, 220. 



THE GILD PERIOD IN ENGLAND "^5 

classes. The architects, the physicians, the lawyers, the 
scribes, the teachers of the middle ages, were almost always 
clergymen, and when employed in these callings were 
rewarded for their services with benefices. We know but few 
of the men who designed the great cathedrals, churches, and 
castles of the middle ages, — those buildings which are the 
wonder of our age for then* vastness, their exquisite propor- 
tions, and equally exquisite detail. But when we do know, as 
it were by accident, who the builder was, he is almost always 
a clergyman. . . . The monks were the men of letters in 
the middle ages, the historians, the jurists, the philosophers, 
the physicians, the students of nature."^ Personal and 
domestic servants there also were, who, though no longer 
slaves in theory, were donbtless then, as in all times, subject 
to all the varieties of treatment possible to persons in this 
relation. On the whole, the best services of the period were 
not rendered directly to the masses of the people. 

The Black Death and its subsequent effects 

Dependents. 2 j_t • -, . • t t ,■ » , r. 

upon the industrial relations oi men to each 
other, together with the slow breaking down of the old feudal 
relation of lord to tenant, and the rise of manufacture and 
trade, were causing an uncertainty of subsistence to be felt by 
many in this period, that had before been unknown in Eng- 
land. Accordingly the problem of supporting and controlling 
both the worthy and the unworthy poor became a new problem. 
The problem was one which at this time had its source chiefly 
in the country, for it was there alone that the industrial 
changes were of such a nature as to throw men out of employ- 
ment. In the towns, the new manufacturing activity tended 
rather to draw labor from the country than to throw out of 
work those men already at hand. The long series of Statutes 
of Laborers, and the ordinances of those towns in which 
country people were found begging, rested upon the idea 

^Rogers, Six Centuries of Work and Wages, p. 163 — G. P. Put- 
nam's Sons, New York. 
*Ashley, vol. II, ch. v. 



76 OUTLINES OF INDUSTRIAL HISTORY 

that "there was sufficient employment, at customary or 
'reasonable' wages in his own town or village, or in the 
country immediately around, for every able-bodied man who 
was willing to work." But v/hat was to be done with those 
really unable to work? The lawmakers decided that these 
ought to be supported by the places where they happened to 
be when the laws were passed. But, if these places were 
unable to help them, such persons should be sent back to the 
place of their birth, there to stay for the rest of their lives. 
The charitable feeling of persons and groups of persons in 
general seems to have been depended upon to prompt sufficient 
care, for it was made the special business of no one to care for 
the dependent. Thus the matter stood until the sixteenth 
century. 

For us now, perhaps, it will do the most good to remember 
that during the Gild Period the old ways of getting a living 
were so broken up, and so many persons were changed from 
producers to non-producers of utility, that local and national 
lawmakers at that time began to legislate about the 
dependent classes and to help such as were able in mind and 
body to get back into the productive classes again. 

The towns had gone on buying political and 

Organization ecouomical privileges from lords and king until 
they became, on a smaller scale, like independent 
nations of to-day. Each town made its own laws, protected 
itself, taxed itself, regulated its own productive enterprises, 
and made all sorts of trade agreements with other towns. In 
times when food was likely to be scarce, towns also bought up 
supplies of food and retailed it to the citizens at cost, some- 
what as towns now furnish a permanent water supply. Mi- 
nute inspection of food and regulation of its quality and prices 
were also secured by direct action of city officers. This was 
called "the surveying of victuals." 

Thus the town controlled the manufacture and trade of its 
own people, and also the manufacture and trade of the country 

^Ashley, vol. II, eh. i; also Green (A. S.), vol. I, eh. vii-ix. 



THE GILD PERIOD IN ENGLAND 77 

people around it, so far as their market was in the town. 
Each town, therefore, was the center of an agricultural com- 
munity and ruled its little economic and political world with 
great independence. 

The organization of men which first undertook 
^""'Giids^fr'* the task of economic regulation within the town 
was, as stated in Chapter I, the Merchant Gild. 
But as the number of different productive processes in a town 
became larger, much of the original work of the Mercliant 
Gild was taken up by the craft gilds, so that finally the Mer- 
chant Gild had very little to do. 

The membership in a craft gild seems to have included all 
the skilled and influential persons in any way connected with 
the manufacture and sale of a certain article. This bound 
together : («) the wealthiest men in the business — those able 
to furnish the most land and capital ; (b) those employers who 
were allowed by the laws to take work from customers and 
become responsible for getting the work done — the undertak- 
ers of the industry; and (c) skilled hired workers. Unskilled 
hired workers and apprentices were not allowed to become 
members.^ 

Two things about this membership should be clearly seen : 
first, if a time ever came when the interests of capitalists, under- 
takers, and hired workers lay in different directions, the gild 
would be likely to fall to pieces from within ; second, if the 
consuming public as a whole, and the unskilled workers in 
particular, should find the craft gild their enemy, these 
organizations might find destructive opposition to them from 
without. These two facts may well be borne in mind later 
when a period whose industries were no longer under gild 
control is studied. 

With reference to the officials of the town, the gilds seem 
to have passed from a time when they controlled their particu- 
lar industries in such subordination to these rulers that the 
consuming public was well treated, as vfell as the gild mem- 

^Green (A. S.), vol. II, pp. 116, 117. 



78 OUTLINES OF INDUSTRIAL HISTORY 

bers well paid for their industry, to a time when the gild 
oflBcers became themselves the town officials and often disre- 
garded the general welfai-e. 

The fundamental purposes of gild regulations seem at first 
to have been two-fold : to secure good material and honest 
workmanship for the consumer, and to secure good wages for 
the workmen. To carry out these purposes, the minutest 
details of quality, size, weight, and quantity, also the pre- 
cise time and place of sale, and the price of each article, 
were subjects of the craft gild legislation, administration, 
and adjudication, subordinate only to the general municipal 
and national regulations. The same purposes no doubt also 
required the organization of each craft into master workmen, 
journeymen, and apprentices, and rigorously enforced restric- 
tions upon the number of apprentices a single master work- 
man could take at one time. By these means the total 
number engaged in each craft in each town, as well as all the 
details of manufacture and sale, were under almost perfect 
control. 

Besides the above purposes, craft gilds also often aimed to 
unite persons whose religious beliefs and social interests were 
alike. Another purpose in some organizations was to care for the 
members in times of sickness, and for the families of members 
when death had left them needy. 

Although society during this period controlled 
National Or- individual producers more through its town and 

ganization of. . . . 

gild organizations than through the national, 
yet some form of national control should not be overlooked. 

For example, national standards for weights and measures 
were being established by such rulers as Eichard I. (1189- 
1199), Henry VI. (1422-1461), and Henry VII. (1485-1509). 
A royal officer called an "aulnager"^ was appointed to inspect 
cloth, both imported and domestic, and see to it that certain 
standards of weight, and quality, and width were adhered to. 
Although, aa manufacture increased, local officials often did 

'Cunningham and McArthur, pp. 96, 97. 



THE GILD PERIOD IN ENGLAND 79 

most of the work of the aulnager, his work was not wholly 
given lip by the nation nntil 1809. In the time of Henry II, 
(1154:-1189) there was a sliding scale adopted to regulate the 
weight of a loaf of bread to be sold for a farthing as the prices 
of corn changed. Some form of this attempt was kept up 
into the eighteenth century. The coinage of money came 
more and .more under royal control. The Statutes of Labor- 
ers of the fourteenth century sought to regulate wages, and 
this attempt in one form and another was not given up until 
1813. Foreign trade was made by national order to flow 
through Staple Towns largely for revenue purposes and that 
it might the more easily be protected from robbers. And, 
finally, manufacture in England was greatly stimulated by the 
importation of Flemish weavers by Edward III. (1327-1377). 
A detailed study of the above national attempts to make 
conditions in accordance with which individual productive 
effort must be expended would doubtless show that the various 
local authorities almost always had great freedom in adminis- 
tering the national laws; and that, even in making these laws, 
there was no well defined national policy that Avas carried out 
under successive kings. The fact was that certain industrial 
matters gradually became too big to be controlled by society 
in its smaller organizations, and, accordingly, the national 
organization made blundering attempts to deal with them. 

The feudal theory of landholding was still 

Landlords. '' ° 

maintained, and this did not allow freedom to 
dispose of land to men who were otherwise owners. It is 
therefore plain that the various classes of occupiers of English 
land, from cotter to lord, were not yet in theory full owners. 
In practice, though, there was progress in this direction. 
For example, the various kinds of free tenants, into which 
class the former villein, cotter, and socmen classes were 
changing, were gradually securing legal protection as tenants. i 
Laws in accordance with which estates passed from father to 
son — the laws of entail and primogeniture — were also being 

^Gamier, vol. I, p. 221. 



80 OUTLINES OF INDUSTRIAL HISTORY 

worked out. Unwritten custom in all the details of land- 
holding was gradually giving place to written law. 

As a result of the changes in laudhokling, however, large 
numbers of persons during this period were being severed 
from any vital connection with the land even as tenants. The 
time was passing when an Englishman as a matter of course 
had direct access to the soil. 

The owner of capital in a modern sense came 
into existence in agricultural England during 
this period in connection with sheep farming.^ Where this 
industry was carried on upon a large scale, the product was no 
longer looked upon, as in the old days, as iirst of all a subsist- 
ence product for those men upon the manor who had taken 
part in producing it, the surplus only being sold ; but the whole 
product was now first of all a market product to be sold in the 
highest market for money. This being so, the condition 
was presented for an investment in sheep in a truly capitalistic 
way. Most of the wool was not wanted by the sheep farmer 
for consumption, but merely as an aid toward getting for 
himself money or a greater variety of other goods for con- 
sumption. 

Among the trading classes in towns, similar capitalistic 
investments were also becoming common. Foreign trade waa 
dangerous and difficult as a rule, but, at its best, it was highly 
profitable, and brought in not only a sufficient return to replace 
the capital invested in goods, but also a handsome surplus. 
From the trading class came stores of ready money, both to 
be loaned to others and to be used by the owners in carrying 
out successfully many new enterprises.^ 

The industrial manager also came into existence 
both in country and in town. As a rule, the 
possessor of capital himself performed this function, but his 
task was already the distinct modern function of an under- 
taker of business enterprises for gain. 

lAshley, vol. II. pp. 267, 268. 
«The same, pp. 209-211. 



THE GILD PERIOD IN ENGLAND 81 

For example, upon the manor it had been customary from 
an earlier time for a lord to let a whole manor to a "firmarius" 
(firmar, farmer) for a term of years at a fixed rental. But 
this firmarius had been heretofore so bound by the customary 
services, gifts, tallages, etc., of the manor that there was a 
continual check upon the amount of produce and revenue 
that he could get out of it for himself. As soon as a whole 
manor was so cleared of its tenants that it could all be devoted 
to sheep farming, the conditions were entirely new. The ten- 
ant could rent a manor from its lord, stock it with sheep, and 
manage his capital and laborers almost wholly upon the plane 
of contract for the utmost return in profit and interest that 
could be reserved after the rent and wages were paid. Such 
management of an estate was that of an undertaker in the 
modern sense, whether the manager was also the capitalist 
or not.^ 

In the town also it seems equally clear that the function of 
undertaker in the modern sense was rapidly developing among 
the traders who were learning to make dangerous, but some- 
times highly profitable, ventures. Of the development of this 
function among the transformers more will be said later when 
the Domestic System of industry is discussed. 

In rural England the number of men who 
' could not look forward to the ownership or leas- 
ing of land, even under the manifold restrictions of the time, 
was growing much larger. Such men were no longer feudal 
dependents of a lord or a church estate, but must look for sub- 
sistence to such purchases as could be made with the wages 
assessed for them by the justices of the peace, in accordance 
with national law. The restrictions as to movement from place 
to place, and as to the amount and condition of wage, were 
many and minute. During this period the rural wage-worker 
began in earnest the toilsome and disappointiug struggle 
for economic freedom that has not even yet been com- 
pletely won. 

^Ashley, vol. II, pp. 267, 268. 



82 OUTLINES OF INDUSTRIAL HISTORY 

Of the wage-workers in the towns, the following extract is 
worth quoting at length: "Before the middle of the four- 
teenth century a 'labor class' had come into existence, in a 
sense of that term in which it had never been true before. 
There were now to be found a considerable number of work- 
men who were neither apprentices, indented to a master merely 
for a period of probation, nor master craftsmen ; men, who, 
without having been apprentices, or, — increasingly as time 
went on — after coming out of an apprenticeship, became the 
employes of master craftsmen. At first the number of these 
'servants,' 'serving-men,' 'valets,' or 'yeomen,' as they were 
variously called, was probably very small. Many master 
craftsmen worked by themselves, or with the aid only of an 
apprentice. For some time the 'servant' was rather the 
subordinate companion, the assistant of the master, than his 
employe. Many ordinances and statutes assigned to him a 
wage more than half as much as that of the master himself; 
and it would often be paid to him, not by the master, but by 
the person employing them both. The relations of master to 
man were not very dissimilar from those of the head of a 
household to the sons of the family ; and, as with the sons, 
the position of dependence was, at first and as a rule, but a 
temporary one, — an intermediate stage during which the 
workman gained further experience, and saved a little capital 
before he set up on his own account. 

"But soon there are indications that this class is increasing; 
and also that it is ceasing to be possible for every average 
journeyman after a few years' employment to set up for him- 
self. There are indications . . . that a body of men is com- 
ing into existence who are unable to look forward as a matter 
of course to a time when they shall themselves be master 
craftsmen. ... By this time, therefore, — in some industries 
as early as the end of the fourteenth century, but in most 
fifty years or more later, — it would be accurate to say that a 
'working class' had arisen in the sense in which we now use 
that term. It is desirable to call attention to this and to 



THE GILD PERIOD IN ENGLAND 83 

point out the further fact that, as soon as this class appeared, 
what is known as the 'lab or -question' also began to perplex 
legislators."^ 

The account, however, goes on to show, what is very 

important for us to note, that there were at this early day 

such differences between employers and employees respecting 

wages and the various conditions under which work was to be 

done, as to justify the statement that the labor question had 

come into existence, but that these disputes were local, isolated 

one from another, and each involved so few men and such small 

interests, compared with the labor question of to-day, as to be 

little more than "family disputes between parents and 

children." 

The Right of So far as the commutation of services went on 

Private Prop- ypQ^ manor and in town, and so far as the 

dom of common fields were enclosed either for pasture 

Contract, qj. fpj. ^]^q substitution of larger -sized contigu- 
ous holdings for the tenants — so far it may be said that 
the economic changes of the time were tending toward a 
greater enjoyment of the right of private property by individ- 
uals. The old feudal conditions were everywhere slowly giv- 
ing way, and just in proportion as the sphere of influence of 
status and custom was narrowed, was the sphere of influence 
of contract widened. Such a process can not be accurately 
described. It must suffice here to see clearly that there was 
motion toward a greater enjoyment of the right of private 
property and free contract. How far Englishmen as a rule 
still were from the enjoyment of either, the brief suggestions 
already given of the continuance of feudal theories, and of the 
existence of regulations, minute and manifold, by craft gild, 
town, and national authority, are sufficient to indicate. 

„ _., 1. Is the modern trade union a direct descend- 

Snggestive 

QnestionB. ^ut of the medieval craft gild? Give reasons.^ 
2. In what respects is a trade union different from a craft gild? 

'Ashley, vol. II, pp. 101, 103, and following. 
«Webb ana Webb, pp. 1-18. 



-84 OUTLINES OF INDUSTRIAL HISTORY 

3. In what respects are the two alike? 

4. What does your town or city now do to secure pure food; 
just weights, measures, and scales; fair prices; etc., for its 
citizens? 

5. Compare the things the United States now does for its 
people with those that were mentioned as being done for the 
English by the national government in the Gild Period. 

6. Through what other organizations than the national 
government does society in the United States now have some- 
thing to say about the manner of carrying on a private busi- 
ness? Illustrate. 

7. Who decides in America how much these various organi- 
zations of society shall have to say about a man's private 
business? Illustrate. 

8. Is it more or less difficult for a man to set up in business 
for himself now than in England during the Gild Period? 
Why? 

9. What is the custom about apprenticing boys to a trade 
now? Why? Give examples. 

10. Have you ever read any histories or novels which treat 
of the times covered by the Home Period and Gild Period in 
England? If so, name them and find out whether any of the 
statements made in these two chapters are illustrated in them. 

11. Show in what important respects the Gild Period was 
different from our own. How was it like our own? 

13. How was it different from the Home Period? 
13. How was it like the Home Period? 



THE DOMESTIC PERIOD IN ENGLAND 85 



Chapter III 

THE DOMESTIC PERIOD OF INDUSTRY IIST ENGLAND AND 

AMERICA^ 

1. How did the efforts of men to get a living 
^ue8tio*n8^^ ^^^^ ^^J influence upon the discovery and 
colonization of America? 

2. Mention some other remarkable voyages, explorations, 
and efforts toward the occupation of territory by Europeans 
during the fifteenth, sixteenth, and seventeenth centuries. 

3. What part in them did the desire for greater stores of 
goods play? 

4. What goods were most eagerly sought? Give examples, 

5. Give any accounts you may have read of great caravans, 
fairs, trading routes, and trading companies, of these and 
previous centuries. 

6. Show how the knowledge of a greater world, which came 
to Europeans with the discovery of America, enlarged their 
ideas of business enterprises. 

7. Compare the time taken for new knowledge to reach 
all classes of people in England then and now. Give reasons 
for the difference. 

^The following general references have been used often in this 
chapter: Hobson, The Evolution of Modern Capitalism, A Study of 
Modern Machine Production — 1894, Charles Scribner's Sons, New 
York; Taylor, The Modern Factory System — 1891, Kegan Paul, 
Trench, Triibner & Co., London; Gibbins, Industry in England, 
Historical Outlines— 1897 , Charles Scribner's Sons, New York ; Bruce, 
Economic History of Virginia in the Seventeenth Century — 1896, 
The Macmillan Co., New York; Weeden, Economic and Social His- 
tory of New England, 1620-1789— 18Q0, Houghton, Mifflin & Co., 
Boston; Wright, Industrial Evolution of the United States — 1895, 
Flood & Vincent, Meadville, Pa. 



86 OUTLINES OF INDUSTRIAL HISTORY 

8. How did the discovery of America affect in any way the 
ideals of English rulers as to what England ought to be? 
Illustrate. 

9. After Europeans had come to America what industries 
did they carry on in this country in ways similar to those of 
their home countries? Give examples. 

10. Name facts and conditions which would make them 
change occupations and methods of production somewhat. 

11. Has your family any tools or other articles that were 
once brought by them or others before them from Europe? 
If so, describe them. 

12. Are such tools and articles used here now? Why? 

13. Have you any tools or articles that were made in the 
home by your parents or grandparents long ago? If so, 
describe them. 

14. Are such tools and articles in use now? Why? 

15. Find out the names of the states in the United States 
and the names of the countries in Europe from which your 
parents and grandparents (and great-grandparents if possible) 
have come. 

[Note. — This information has been used by Professor 
George E. Vincent of the University of Chicago, as follows : 
The facts about each pupil in the class are put into the hands of 
one person who traces in different colors upon outline maps of 
the United States and Europe lines from the place where the 
pupil lives to the places where his ancestors lived. It is then 
asked what information the diagram gives about the gen- 
eral trend of immigration to this country and about migration 
within the country.] 

16. What is meant by the word frontier in the United States?' 

'Turner, The Significance of the Frontier in American History, 
Annual report of the American Historical Association, 1893, pp. 
199-327 ; also The Fifth Year Book of tho National Herbart Society, 
1899, pp. 7-41. 

Compare Vincent, A Belated Frontier — "The American Journal 
of Sociology," July, 1898, The University of Chicago Press. 



THE DOMESTIC PERIOD IN ENGLAND 87 

17. In what respects is frontier industry difierent from the 
industries of one of the oldest parts of the country? Give 
illustrations. 

18. Do you know of any places in the United States where 
frontier life now exists? If so, describe the productive 
processes there. ^ 

19. What kind of services can be obtained upon a frontier? 

20. Write the history of the industrial life of a frontier 
settlement from the beginning until it becomes a city.^ 

21. What change takes place in the number of persons 
engaged in the production of services, compared with the num- 
ber who produce wealth, as a frontier settlement develops into 
a city? 

22. Show that a similar change in ratios between service 
producers and wealth producers has taken place in England 
and the United States, as nations, since early days.^ 

23. Have you read any novels which treat of life in England 
or America between 1450 and 1775? If so, note the illustrations 
of productive enterprises and methods of the time, and com- 
pare them with such enterprises and methods of to-day. 

ENGLAlfD 

The Point of We havc now brought this sketch of the indus- 
view. trial development of England down to a time 
when the Domestic System of industry was slowly making 
its way. This system must now be briefly described, not only 
because its study will reveal the steps in the evolution of indus- 
try which follow those that have already been mentioned, but 
also because it furnishes the immediate background for that 
organization of indiistry which is about us now, and which we 
briefly studied by means of the suggestions given in Part I. 
The Industrial Eevolution, and the Factory System of indus- 

^Turner and Vincent. 

^Small and Vincent, Introduction to the Study of Society, Book 
11—1894, The American Book Co., New York. 
^Harris, Is There V/orle Enough For All?— ''The Forum," vol. 35. 



88 OUTLINES OF INDIJSTRIAL HISTORY^ 

try which it ushered into the modern world, can not be well 
understood in many of their important relations, unless the 
system which preceded them is studied also. 

Another fact of great importance to us in the United States 
must also here be emphasized. During the period of the 
Domestic System of industry in England, America was 
colonized, the English colonies here were united in enduring 
bonds of common political and economic interests, and long 
steps were taken toward securing their independence of the 
mother country. During this period, therefore, the industrial 
development of England directly affected the industrial devel- 
opment of the English colonies in America, and, hence- 
forth, both England and her colonies must be included in 
our story. 

The time when the Domestic System was coming 
GM systemfo ^^^^ ^^^^ ^^ ^^°^ ^^® Same for all industries, for 
'^'tTm siowT*' some entered upon the enjoyment of more than a 
local market much earlier than others. From the 
middle of the twelfth to about the middle of the fifteenth cen- 
tury is the period belonging in general to the Gild System of in- 
dustry. But in the woolen industry, which we have already 
seen was the first to enjoy a foreign market, the change from 
the Gild System began much earlier than 1450, while even 
after the fifteenth century, the Gild System was still in 
operation in many subordinate businesses. These facts 
should serve to remind us once again that industrial 
changes from one system to another are slow in any par- 
ticular industry, and far from uniform for industries in 
general. Industrial evolution has been the work of cen- 
turies, not of decades; and even in the case of the Indus- 
trial Revolution of the eighteenth century, the word 
"revolution" is applicable only because there was so great 
a change in the comparatively short period of forty or fifty 
years. 

We must, therefore, look for the beginnings of the Domestic 
System in the woolen industry, some phases of which have 



THE DOMESTIC PERIOD IN ENGLAND 89 

already been seen to have affected profoundly the agricultural 
life of the English people during the centuries following the 
Black Death. 
Transforming, P^of essor Ashley^ says that * 'the conditions under 

method of.i "v^hich woolen manufacture was carried on by the 
new system were almost the same the first time these conditions 
were revealed by a national statute in 1465 as they were three 
hundred and forty years afterward when, in 1806, a Parliamen- 
tary Committee made a report on 'the system of the Master- 
Clothiers of the West of England. ' . . . Half a century later, an 
act of 1511-12 gives a more explicit account. It speaks of the 
wool being 'delivered for or by the clothier' to certain persons 
'for breaking, combing, carding, or spinning' ; of the duty of the 
breaker or comber 'to deliver again to the said clothier the same 
wool so broken and combed' ; of the duty of the carder and 
spinner 'to deliver again to the said clothier the due amount 
of yarn of the same wool' ; of the duty of 'the weaver which 
shall have the weaving of any woolen yarn to be webbed into 
cloth' 'to weave, webb, and put into the web for cloth as 
much and all the same yarn as the clothier, or any person for 
him, shall deliver to the same weaver'; and of the like duties 
of the 'walker (or fuller)' to return unimpaired the cloth 
committed to him. 

"Thus the central figure to be studied in the new organiza- 
tion of labor is the clothier. He buys the wool ; causes it to 
be spun, woven, fulled, and dyed; pays the artisans for each 
stage in the manufacture ; and sells the finished commodity to 
the draper." 

This clothier, therefore, was a typical undertaker, combin- 
ing capital, labor, and natural resources, for the purpose of 
securing a product which he himself controlled. The clothier 

^As one of the most characteristic differences between the Gild 
Period and the Domestic Period appears in connection with the 
making of woolen cloth, the transforming group of occupations is 
treated before the extractive group, in this chapter. 

^Vol. II, pp. 227, 238. 



90 OUTLINES OF INDUSTRIAL HISTORY 

"took the risk of the fluctuating demand of that greater 
market which had now come into existence." 

The small master artisan who, under the Gild System, 
either worked by the piece for the consuming customer on the 
customer's materials, or was a transferrer as well as trans- 
former in that he bought raw material and sold the finished 
commodity to a local customer, now became a transformer 
only, and even that in only one of the many partial processes 
into which clothmaking was divided. His position was 
henceforth dependent not upon the comparatively stable 
demand of local consumers but upon the more or less abun- 
dant manufacture demanded by the clothier. Still he might 
continue to have journeymen and apprentices under him as 
before. 

But, unless apprenticeship was compelled by law, and that 
could often be evaded, there was nothing in the system itself 
which kept any individual who had the necessary skill and a 
single spinning wheel or hand loom from passing by the 
master workman and doing work directly for the clothier 
undertaker who usually paid wages by the piece. 

Under the Domestic System, therefore, artisans, even when 
working for a master artisan, might do the work either at 
their own homes or at a place near by provided by the 
master artisan; and they might devote themselves entirely 
to spinning and weaving every working day of the year, or 
give up to manufacture merely those occasional hours and days 
that could be snatched fi'om recreation on the one hand, or 
could be spared from their ordinary work in the field and 
about the house on the other. 
Transformers ^hus. Under the Domcstic System of industry, 
'the IfoSntry" ^^® couutry, for the first time, became familiar 
Districts. Tjifitli classes of artisans who were devoting them- 
selves to the making of goods not demanded by local needs. 
All forms of textile manufacture were thus scattered over the 
country. Of the textile goods, woolen was by far the most 
important, but linen, silk, and cotton goods were also manu- 



THE DOMESTIC PERIOD IN ENGLAND 91 

factured. The tools were generally simple, worked by hand, 
and used in or near the homes of the workers. Most of these 
country artisans owned a cow and cultivated a garden or a larger 
plot of ground, from which sources the family was able to get 
a considerable part of the necessary food. Hardly any of the 
rural manufacturers, therefore, were left with absolutely no 
means of subsistence while temporarily deprived of their 
regular employment. 

Another new phenomenon of this period must be noted. 
Not only were artisans scattered through the country districts, 
but those artisans who were making a special kind of cloth 
were scattered over one area, and those making another kind 
over another area. "From its first appearance the worsted 
manufacture had been confined to Norwich and the country 
around. So now the new woolen manufacture in the country 
districts did not spread itself evenly over the whole country, 
but, after a short period of experiment, concentrated itself in 
particular districts — especially the Eastern Counties, Devon- 
shire, and Somerset, and Yorkshire. The concentration went 
further still ; for each of these districts confined itself to the 
manufacture of a few staple varieties peculiar to itself."^ 

Thus, during this period, the personal division of labor was 
carried further than it had been carried before in England 
since the Norman Conquest, and a beginning of territorial 
division of labor was clearly under way. Towns as well as 
families were no longer able to satisfy all of their own wants. 
Extractive In- We havc already spoken, in Chapter II, of the 

Agriculture, rapid cnclosure of the common fields during the 
last part of the fifteenth century and the first part of the six- 
teenth. After that, it went on very slowly during the whole 
period until about 1760, at which time probably one-third of the 
work remained to be done.^ It is therefore clear that the same 
background of a wasteful, unprogressive, and awkward system 
of agriculture, as was described in Chapter I as general in 

^Ashley, vol. II, pp. 46, 47. 
^The same, p. 386, 



92 OUTLINES OF INDUSTRIAL HISTORY 

England at the time of the Domesday Survey, must be imag- 
ined as existing over fully one- third of the arable land of 
England during the whole period now under consideration. 
It is true that conditions of tenure and the personal interrela- 
tions of the manorial population were somewhat different now ; 
but the methods of tillage were not radically changed. Upon 
the manors where enclosure had taken place for the purpose 
of establishing convertible husbandry some progress was doubt- 
less being made, but, taking the agriculture of England as a 
whole, it presents only the varieties possible between pasturage 
on the one hand and convertible husbandry on the other. 
Agricultural implements were still comparatively simple, 
varieties of roots and grasses were few, the science of fertiliza- 
tion was unknown, breeds of animals were inferior, rotation of 
crops was hardly begun, and with the exception of wool, and 
some live-stock which could be driven to a distant market, 
markets were still narrowly local. Anything like modern 
agricultural societies and papers, for the social study of agri- 
cultural methods and the general distribution of the best 
extant knowledge of soils, seeds, breeds of animals, and tillage, 
was unknown. 

No reliable statistics of occupations at different periods 
exist, but the following estimate was made in 1688.^ It 
shows how slightly occupations were classified and also sug- 
gests the continued importance of agriculture in comparison 
with all other occupations : 

Agricultural Classes (freeholders, farmers, 
laborers, out - servants, cottagers, and 

paupers) 4,625,000 

Manufacture 240,000 

Commerce 246,000 

[Note. — Graphic statements of these figures are easily 
entered in note-books, and are interesting to compare with 
similar statistics for other periods.] 
' Hobson, p. 22. 



THE DOMESTIC PERIOD IN ENGLAND 93 

^dustril^- -^^^^^ mining was not of great importance until 
Mining.i -^ell into the eighteenth century. Even as late 
as 1720, England imported 20,000 out of the 30,000 tons of 
iron required for her hardware manufactures. At this date it is 
estimated that the mining of iron and manufacture of hard- 
ware employed about 200,000 persons. Copper, brass, and 
tin, were comparatively unimportant. 

In a word, lack of power, of adequate machinery, and of meth- 
ods kept man, until near the close of the period, almost helpless 
in the presence of the vast coal and iron deposits of England. 
Extractive In- -A-lthough the irou Smelted was inconsiderable in 
**'*Sngand^' quantity, it cost England a great amount of 
Fishing. timber during the seventeenth and the eighteenth 
century. For the purpose of smelting, timber was reck- 
lessly used during much of the period. The decreasing 
forests were also called upon to furnish an increasing amount 
of timber for shipbuilding. 

As to fishing, it must be supposed that fish had always been 
taken in larger or smaller quantities along the coasts of Eng- 
land. But, during Tudor times (1485-1603), fishermen were 
greatly stimulated by various national laws which had for their 
ultimate purpose the building up of a large merchant fleet 
manned by skilful seamen. These laws were of two kinds : 
first, measures designed to increase the consumption of fish — 
for example. Englishmen were to eat fish two days in the week 
the year round ; second, measures which provided bounties to 
successful fishermen. Although the first of these laws could 
not in the nature of the case be universally enforced, yet, 
because of legislation and for other reasons, the English 
developed a numerous and hardy class of fishermen. During 
the seventeenth century they were so successful as to wrest 
the local herring fisheries from the Dutch, who had long 
monopolized them. From the very first. Englishmen have 
had their full share of the Newfoundland cod-fishing.'* 

iHobson, p. 23. 

^Cunningham and McArthur, pp. 21, 124, 125. 



94 OUTLINES OF INDUSTRIAL HISTORY 

Transportation: If soHie adequate idea of the transportation 
The ways.i facilities of this long period can be gained it will 
help us more, probably, than any other one thing to under- 
stand the marvelous differences between the present century 
and the eighteenth. First, what were the ways by land and 
by water? After the Koman roads decayed, it does not appear 
that any adequate attention was given to roads in England 
until late in the eighteenth century. Throughout the middle 
ages they were left almost entirely to private care. "Even as 
late as the middle of the sixteenth century, the public ways 
appear to have been little better than tracks made at random 
through the fields; in dry weather they might have been 
practicable, but in the winter season their condition must have 
been dreadful. The only attention bestowed upon them by 
the legislature until the time of Mary I. (1553-1558) amounted 
to an injunction to the neighbouring proprietors not to plough 
them up, and enclose them as part of their lands. "^ Mrs. 
A. S. Green tells a story relating to a highway in the market 
town of Aylesbury in 1499, which seems almost incredible. 
A glover with his wares was on his way to this town. 

"It happened that an Aylesbury miller, Eichard Boose, 
finding that his mill needed repairs, sent a couple of servants 
to dig clay, 'called ramming clay,' for him on the highway, 
and was in no way dismayed because the digging of this clay 
made a great pit in the middle of the road ten feet wide, eight 
feet broad, and eight feet deep, which was quickly filled with 
water by the winter rains. But the unhappy glover, making 
his way to the town in the dusk, with his horse laden with 
paniers full of gloves, straightway fell into the pit, and man 

'Cooley, TTieory of Transportation, Publications, American Eco- 
nomic Association, vol. IX, No. 3, ch. i. New York. The reader is 
referred to this work for a sociological study of transportation. 
The division of the subject into the sub-heads "The Ways," "The 
Vehicle" and "The Motive Power" is Mr. Cooley's. 

'^Garvey, The Silent Revolution, p. 9—1853, William & Frederick 
G. Cash, London. 



THE DOMESTIC PERIOD IN ENGLAND 95 

and horse were drowned. The miller was charged with his 
death, but was acquitted by the court on the ground that he 
had no malicious intent, and had only dug the pit to repair 
his mill, and because he really did not know of any other 
place to get the kind of clay he wanted save in the high- 
road. "^ 

After 1523, various acts of Parliament were passed relating 
to roads, but they were not improved much until well into 
the eighteenth century. A series of acts establishing turn- 
pikes and authorizing the collection of tolls for their repair 
began in the reign of Charles II. (1660-1685), and were 
generally operative throughout the eighteenth century, so 
that by the first of the nineteenth century, roads were, in com- 
parison with the past, in good condition. 

Still, these turnpikes did not extend over all England, and 
though lauded by some travelers were execrated by others. 
The following picture of transportation facilities of the middle 
eighteenth century is probably fairly accurate : 

"Agricultural produce was almost entirely for local con- 
sumption, with the exception of cattle and poultry, which 
were driven on foot from the neighbouring counties into Lon- 
don and other large markets. In the winter, even round 
London, bad roads were a great obstacle to trade. The 
impossibility of driving cattle to London later than October 
often led to a monopoly of winter supply and high prices. 
The growth of turnpike roads, which proceeded apace in the 
first half of the century, led to the large substitution of carts 
for pack horses, but even these roads were found 'execrable' 
by Arthur Young, and off the posting routes and the neigh- 
borhood of London the communication was extremely diffi- 
cult. 'The great roads of England remained almost in this 
ancient condition even as late as 1752 and 1754, when the 
traveler seldom saw a turnpike for two hundred miles after 
leaving the vicinity of London. ' ' '^ 

iGreen (A. S.), vol. II, pp. 31, 33. 

^Hobson, p. 25. Compare Gibbins, 854, 855, 



96 OUTLINES OF INDUSTRIAL HISTORY 

In regard to water ways, some attention had been given 
to the rivers and harbors before 1750, but it was not until 
after this date that the Duke of Bridgewater practically 
inaugurated the great system of canals which soon connected 
many rivers and important towns. By means of these canals 
the internal transportation of heavy commodities, especially 
coal, for considerable distances was first made possible in 
England/ 

Transportation: ^^ ^^^^r ways WBYB still in a primitive condition 

The Vehicle, ^t the middle of the eighteenth century, and 

if roads could be called good only in comparison with previous 

ones, at the end of the century, what can be said of vehicles? 

As to ships, we know that they were such that the 
whole Atlantic coast of America had come to know them, and 
that the Pacific and Indian oceans were growing accustomed 
to them. The world is greatly in debt to the ships of this 
period. We know also that the English ships did not suffer 
the Spanish Armada to land an army in England, and that 
English colonists and English trade more than held their own 
in competition with all the rest of Europe. In part at least 
these results were due to English ship-builders and sailors, who 
were continually encouraged and often substantially aided by 
national legislation. 

For the transportation of merchandise, packhorses were only 
partially supplanted by carts during the fii'st half of the eight- 
eenth century. Persons also, until the time of Elizabeth (1558- 
1603), must ride either upon horseback or in a horse-litter. 
Doubtless either of these methods was for a long time more 
comfortable than the rude coaches which were first used, and 
we find Arthur Young traveling on horseback in the last 
quarter of the eighteenth century. 

The first coach is said to have been used by Queen Eliza- 
beth in 1564.^ "These first coaches were vast, unwieldy 
structures of timber and iron, which rested on the axle with- 

iHobson, pp. 25, 26. 
*Garvey, pp. 45, 46. 



THE DOMESTIC PERIOD IN ENGLAND 97 

out the intervention of springs, or any other contrivance to 
break the force of the tremendous bumps and shocks which 
every moment threatened to dislocate the frames of the pas- 
sengers. It required six, eight, sometimes ten, horses to drag 
those ponderous vehicles at a walking pace through the series 
of ruts, gullies, and quagmires which were then called roads, 
and what with the groaning and creaking of the machine 
itself, and the shouting and flogging of the postilions, it may 
be a question whether the grandeur of the new mode of con- 
veyance compensated for its miseries." 

In spite of their discomfort, however, the use of coaches so 
increased that, in 1673, we find a seventeenth century croaker 
bemoaning the fact that coaches, carrying eighteen passengers 
each, made the distance from London to York, Chester, and 
Exeter in four or five days. "He then calculates the vast 
amount of employment those eighteen persons would give to 
grooms, farriers, innkeepers, hostlers, saddlers, etc., if each 
were to ride his own horse instead of adopting the revolution- 
ary practice of clubbing for a common conveyance."^ 
Although it must be supposed that these coaches slowly 
approached the patterns with which we are familiar in the 
tally-ho and modern coach, still it must be remembered that 
the coach in some form was the limit of comfort and speed 
in land travel during the most favored years of the most 
favored century of this long period. 

Transportation: ^uriug the last half of this period, therefore, we 
Motive Power, j^q^ think of cumbrous vehicles for passengers 
and rude carts for merchandise coming slowly into use upon 
the gradually improving turnpikes of England, At best, 
however, they were all painfully drawn by the puny strength 
of panting animals. Upon the water likewise, although Eng- 
lish sails were now upon every sea, commodities, letters, dis- 
patches, and men themselves were all continually at the 
mercy of the inconstant wind. 

^Garvey, p. 50, 



98 OUTLINES OF INDUSTRIAL HISTORY 

Transporters Although Mr. Rogei's^ thinks the roads of the 
As a Class, thu-tsenth and fourteenth centuries were better 
than in the first half of the eighteenth, and that there was a 
class of men in the earlier period who devoted themselves 
wholly to carrying goods for pay, yet we certainly find many 
signs in the second half of this period of a grov/ing differentia- 
tion of a transporting class. Coaches for passengers have 
already been mentioned. In a general way, also, increase in 
trade that was not narrowly local, and the improved facilities 
for transport of all kinds would necessitate an increasing 
specialization of persons for the carrying business. 

In addition to these considerations, one special illustration 
may be mentioned. James I. (1603-1625) organized a body 
of messengers to carry letters and dispatches more regularly 
than had before been possible by special couriers. Charles I. 
(1625-1649) improved upon this organization and established 
a rate of postage over a few roads for England and Scotland. 
These mails were carried by boys on horseback, at the rate of 
five miles an hour, when they were not delayed by losing 
their way and were not stopped by robbers. Important mes- 
sages were still sent by special couriers. Cromwell, in 1657, 
and Queen Anne (1702-1714) still further improved the postal 
service so that the basis of the present system was laid. Buf. 
the expense was so great that only the rich could afford to 
send frequeut letters. "Poor persons living in different parts 
of the country were then [early eighteenth century] more 
completely separated from one another than the settler in 
Australia is now from his friends in England, though the 
whole mass of terraqueous globe intervenes between him and 
them."^ 

In concluding these paragraphs on the condition of trans- 
portation dm-ing the period of the Domestic System of industry, 
it must be said, that transportation of heavy goods long dis- 
tances by land was rarely attempted ; that, though there was 

'Rogers, p. 135. 
''Garvey, p. 54. 



THE DOMESTIC PERIOD IN ENGLAND 99 

now an increasing number of transporters, most of the carry- 
ing was still undifferentiated from the work of extractors and 
transformers on the one hand and from the work of trans- 
ferrers on the other ; and that, in consequence, most of the 
inland transportation that had developed was still, as for cen- 
turies past, toiling along the country ways that radiated from 
towns into tributary agricultural areas rather than along the 
more ambitious turnpikes that were being constructed between 
these towns. 

Transferring: In addition to the Merchants of the Staple, pre- 

companies.i viously mentioned, whose business was mostly in 
the export of raw materials, there grew up during this period 
companies of merchants for internal trade, and Merchant 
Adventurers for pushing foreign trade in manufactured 
articles, especially cloth. 

Various other special com.panies more or less under national 
supervision and, as a rule, with national consent and a 
charter, were also formed for both political and economic pur- 
poses. The East India Company, The Plymouth Company, 
The London Company, and The Hudson Bay Company are 
familiar names to all of us. The part they played in the 
opening up of trade with new lands, in colonization, and in 
the political organization of colonies can hardly be overesti- 
mated. India and North America possess many traces of 
their activity to this day. The Chartered Company of South 
Africa, which a few years ago came into such political prom- 
inence on account of its friendly attitude toward the attempted 
raid of the Transvaal by Dr. Jamieson, and later v/as such an 
important factor in the war between the English and the 
Boers, is a good example in our times both of the economic 
and the political possibilities of such companies. 

Transferring: Duriug the reign of Henry VIII. (1509-1547), 

'^°*'For'^\g*n *** ^^^ ^^® trade of the transferring companies with 

Markets, ^^^q territory subject to Charles V. of Spain was 

for a time cut off. How this affected the English merchants, 

^Gross, vol. I, pp. 148-155. 



100 OUTLINES OF INDUSTRIAL HISTORY 

and, through them, all connected with the manufacture of cloth 
is told by Professor Ashley^ in a quotation from a contemporary 
historian, Hall, as follows : "All broad-cloths, kersies, and cot- 
tons lay on their hands. Insomuch as when the Clothiers of 
Essex, Kent, Wiltshire, Suffolk, and other shires which use 
Cloth-making, brought clothes into Blackwell Hall, of London, 
to be sold, as they were wont to do, few merchants or none 
bought any cloth at all. When the Clothiers lacked sale they 
put from them their spinners, carders, tuckers, etc., and such 
other which live by clothmaking, which caused the people 
greatly to murmur, and specially in Suffolk." 

Compare this clogging of the activity of foreign merchants, 
clothiers, master artisans, journeymen, apprentices, and even 
farmers who raised the wool, with the comparatively stable 
conditions of the economic activity of the population during 
the old Norman days of self - sufficing Family Industry. 
England itself could no longer live an isolated economic life. 
But this foreign market was more important in the cloth trade 
than in any other, and the bulk of English industry, even in 
the transforming group of occupations, should perhaps still be 
thought of as taking place within homes for home consump- 
tion and for small town markets. 

Some writers speak of the days of customary 

Transferring: ^ •' , *' 

Natural exchanges by barter as a period of natural 

Economy and a ^ ± 

Money cconomy, and of times when money payments 

Economy.* ."" i , . « . , 

are macie on the basis of a contract as a period 
of money economy. Only when money economy prevails can 
each new contract be made on the basis of the conditions 
existing at the time — little affected by custom. Indeed, goods 
and services often continue to be sold for customary prices for 
a long time after barter has given way to money payments. 
In any nation, as the custom of barter grows less common, 
the practice of money payments grows more common. In 

'Ashley, vol. II, p. 231. 

^Cunningham and McArthur, pp. 140, and following. Compare 
also Ashley, vol. II, p. 395. 



THE t)OMESTlC PERIOD IN ENGLAND lOl 

England at the time of Domesday Survey, barter — natural 
economy — was most common, although money payment — 
money economy — was known. Just when money payments 
became more common than barter it is hard to say. During 
the Domestic Period, however, so far as the control of gilds 
broke down, and so far as trade extended from one town to 
another and to foreign countries, money payments became the 
rule. On the other hand, so far as trade still continued to be 
between neighbors and under the control of local gilds, 
barter was doubtless very common. 

Transferring: Coinage becamc more and more the care of the 
PriclT^and national government. Henry VIII. (1509- 
BanW 1547) and Edward VI. (1547-1553) debased the 
coinage by reducing the size of coins, and adding to the amount 
of alloy in them ; and men accordingly refused to give so many 
other goods for a coin as formerly. Prices went up rapidly. 
Elizabeth (1558-1603) restored coins to their old degree of fine- 
ness, bat did not restore their weight. Silver also came in from 
the New World, so that coin was more abundant. Men, there- 
fore, still refused to give so many goods as of old for a coin. 
One small coin, when coins were many, did not seem so desir- 
able to Englishmen as one large coin of equal fineness had 
seemed when coins were not so many. On account of this 
decrease in size and increase in number some writers estimate 
that a coin in the time of Charles I. (1625-1649) would buy 
only one-third or one-fourth as many commodities in general 
as a coin of the same name in the time of Henry VII, (1485- 
1509).^ 

Another difficulty that had to be met, and it is still puzzling 
statesmen, was the adjustment of the coinage of England to 
that of other nations. The increase in foreign trade necessi- 
tated the continual payment of trade balances, and the main- 
tenance of armies in the Low Countries by William III. 
(1689-1702) required money of a higher standard than the 
English to be spent there. At one time it took one hundred 

'Cunningham and McArthur, p. 145. 



lOa OUTLINES OF INDUSTRIAL HISTORY 

and thirty-three English pounds to buy the supplies in the 
Low Countries that one hundred pounds of the local money 
would buy. Better coins v/ere therefore minted in England.^ 

In the eighteenth century, the changing values of gold and 
silver caused the present day problem of maintaining a proper 
ratio so that coins of both metals would circulate freely, to 
come into special prominence in England. Various changes 
in the weight of coins were made until 1816, when England 
tried to cut the Gordian knot by giving up the attempt to 
keep the coinage ratio of gold and silver the same as their 
market ratio, and by making gold the only standard. That 
this attempt has not been wholly satisfactory for all persons 
in all nations, the presidential campaign of 189G in the United 
States is proof. 

The heavy expenses of the government in foreign wars, and 
the necessities of traders, caused the foundation, in 1694, of 
the Bank of England, which has remained to this day. By 
this bank large stores of gold and silver, that had formerly 
lain in the hands of individuals and had been loaned to trad- 
ers chiefly through the agency of private firms of goldsmiths, 
were collected and made a permanent fund from which both 
the government and private persons could borrow. "With 
large reserves of gold in its vaults, and with the active support 
of the government guaranteed, the bank soon issued paper 
promises to pay, in the form of bank notes, which hencefor- 
ward furnished a more convenient medium of exchange than 
Englishmen had ever before known. During most of the 
time since their first issue these notes have been exchangeable 
on demand at their face value for coin. When they were not 
so exchangeable, it was for the reason that they had been 
issued too far in excess of the coin that was in reserve.^ 

In literature, this period included the Eliza- 
bethan writers, the contemporaries of Milton, 
Pope, and Dry den, and the companions of Addison, The 

^Cunningham and McArthur, p. 147. 
'The same, pp. 148-150. 



THE DOMESTIC PERIOD IN ENGLAND 103 

Eeformation ended the long allegiance of England to Rome, 
Puritanism grew up, and toward the close of the period 
Methodism inaugurated a great religious and philanthropic 
revival. Newspapers were started, the first English novel was 
written, and the era of modern science and invention was on 
the threshold of realization. Among statesmen, Wolsey, 
Walpole, and William Pitt may be named. The Eenaissance 
was one not only of literature but of a larger life on all sides 
for the upper classes. Notwithstanding this, the condition of 
the masses, even near the close of the period during the days of 
William Pitt, is described by Mr. Green^ in these words : " At the 
other end of the social scale lay the masses of the poor. They 
were ignorant and brutal to a degree which it is hard to con- 
ceive, for the increase of population which followed on the 
gi'owth of towns and the development of commerce had been 
met by no effort for their religious or educational improve- 
ment. Not a new parish had been created. Schools there 
were none, save the grammar schools of Edward and Eliza- 
beth, and some newly established 'circulating schools' in Wales, 
for religious education. The rural peasantry, who were fast 
being reduced to pauperism by the abuse of the poor laws, were 
left without much moral and religious training of any sort." 

Clearly the services of statesmen, writers, the clergy, and of 
teachers were not yet enlisted ideally in the cause of human 
life as such. Visions of economic, naval, military, and 
national greatness floated before the eyes of the leaders of the 
servant class in England, but their eyes were yet blinded to 
the ideal of an abundant human life for every human being. 
Personal and domestic servants must be included at least by 
implication in the section on "Laborers." 

During the fifteenth and the sixteenth century 

Dependents.^' ^^^^ ^-^^ uufortunatc poor and unworthy beggars 

greatly increased. Responsibility for the care of the poor had 

^Green (J. R.), Short History of the English People, ch. x — 1895, 
Harper Brothers, New York. 
"Ashley, vol. II, pp. 339, 353-359. 



104 OUTLINES OF INDUSTRIAL HISTORY 

been laid upon local charity in general, and careless giving 
was the result. There was no means of uniting the efforts of 
different persons and institutions. It therefore became easy 
for a man who did not choose to work to live without it. 

At the same time, many honest persons suffered much 
because only those who begged were helped. Eviction from 
manors, the suppression of monasteries by Henry VIII. 
(1509-1547), the difficulty of finding and keeping employment 
in those transforming industries that now sent their products, 
not to a well-known and steady local market, but to a distant, 
unknown, and fluctuating foreign market, and the great trains 
of "idle and loitering serving men whom wealthy gentlemen 
carried about with them at their tails" tended all the time to 
swell the army of dependents. Certain it is that for one cause 
and another, the sixteenth century found the problem of its 
dependents a perplexing one. 

Accordingly, a long series of legislative acts which were 
summed up in the Elizabethan Statutes of 1601 attempted to 
deal with the problem. The dependents who could not work 
were to receive treatment different from that given to those 
who could work. The first were to be supported, not by 
indiscriminate gifts, but from compulsory poor-rates in the 
hands of parish officers. The able-bodied, whether willing or 
unwilling to work, were to be given work by the same local 
officers. 

No longer was each man a member of a compact feudal com- 
munity whose reciprocal services and wealth provided for each 
one's want. Men had become more nearly free in theory, but 
many of them were finding the task of getting a living one of 
gTOwing uncertainty. This is the problem which law-makers 
have had to face from a time before Elizabeth (1558-1603), 
and it has not yet found a complete solution: "How can we 
have a working class of free men, who shall yet find it easy to 
obtain sustenance?" ^ 

'Toynbee, Lectures on the Industrial Revolution in England, 
pp. 98, 99—1884, Rivingtons, London. 



ME DOMESTIC PERIOD IN ENGLAND lOS 

Society: The When Englishmen had fairly begun to make 
*^**Giid^** ** cloth at home, instead of to export raw wool, 

Kegniiations. ^j^^ Merchant Adventurers pushed its sale to 
Venice, Prussia, Denmark, to the shores of the Black Sea, 
and even to the great Russian Fair at Novgorod.^ Accord- 
ingly, vfhat has been described as the Domestic System of 
manufacture grew up. The traders and master craftsmen 
within a gild desired to avail themselves of the services of 
workmen, both in town and country, "who were not members 
of the gild, in order to have as much cloth as possible to sell 
in this great new foreign market. The skilled workers within 
the gild suffered from this invasion of their monopoly of 
work. Manufacturers in any part of England who could 
produce cloth the cheapest, inevitably threw into confusion 
the wage scale of all their more conservative competitors. 
The great mass of workers not members of any gild in towns, 
and rural workers, in hours and seasons of leisure from their 
farming, strove with each other for an opportunity to do a 
little spinning and weaving regardless of apprenticeship and 
authorized conditions of labor. Therefore the minute gild 
regulations respecting number of apprentices, length of 
apprenticeship, place of work, length of the working day, 
amount of wage, etc., were often evaded or openly dis- 
regarded. The industry had become too large and too 
headstrong to be driven in any such harness of strings 
as the trade rules of a single town. Nothing weaker than 
the national authority could longer control the woolen 
industry. 
Society: Sutaor- Under the stress of slowly working economic 

dlnation ofi. i-i-ii. l i • i-i 

Towns to tiie lorccs Combined With gTcat changes m national 
policy which will soon be mentioned, the eco- 
nomic and political independence enjoyed by towns in the 
fourteenth and fifteenth centuries rapidly gave way in the six- 
teenth. The town as a unit of industrial control gave way 

»Green (A. S.), vol. I, p. 53. 



106 OUTLINES OF INDUSTRIAL HISTORY 

to the nation. "Tovv'n economy" ^ gave place to "national 
economy." 

Towns had made so many intertown agreements about 
trade that no one of them controlled its own trade as formerly. 
Manufacture had escaped from the gild control into the 
country yillages and farmhouses, and towns were giving up 
the "survey of victuals," and town purchases of food for the 
inhabitants, thus throwing the individual more on his own 
responsibility in the task of getting a living.^ 

The Tudor sovereigns (1485-1603) also made the represent- 
atives of towns in Parliament more like local officers to carry 
out the royal will than real representatives whose purpose 
was to get Parliament to do what the towns willed. 

"Under the new conditions the individual life of the 
borough ceased to have the same significance as of old, and an 
era opened in which its highest destiny was to be employed 
as an instrument of the royal will for national ends, and its 
only glory lay in forming one of the members of a mighty 
commonwealth. ' '^ 

From the time of Richard II. (1377-1399) 

Society: The . , , . . , - ' 

National national authorities seem to have had more or 

Ideals.* 

less of an idea that English industry as a whole 
should result in an increasing store of bullion — gold and silver. 
As England did not possess mines of precious metals, this 
bullion must therefore come from foreign trade. And it could 
come from foreign trade only on condition that English 
merchants sold abroad more goods than they bought. As 
other nations also sought to do the same thing, not much 
headway was made until a method was worked out. This 
method sprang from the theory that England might buy 
as many goods as she chose abroad, provided she would sell 

^Schmoller, The Mercantile System, pp. 1-47 — Economic Classic 
Series edited by Ashley — 1896, The Macmillan Co., New York. 
■^Ashley, vol. II, pp. 42-54. 
sQreen (A. S.), vol. II, p. 448. 
^Cunningham and McArthur, pp. 126-133 and following. 



THE DOMESTIC PERIOD IN ENGLAND 107 

them again for a surplus; or she might buy raw material 
abroad, manufacture it in England, and sell the product 
abroad for another surplus. Thus manufacture and foreign 
trade were more productive, from the point of view of the 
nation as a whole, than the extractive industries, because the 
net result of the former to the nation might be an increased 
store of gold and silver. This theory of the productivity of 
manufacture and foreign trade is usually called mercantilism. 

Another idea which went with mercantilism was that, even 
if agriculture did not result in an increase of gold and silver, 
an adequate food supply raised in England was necessary to 
make the nation independent of other nations, and, therefore, 
agriculture too must be encouraged. 

The nation must become great, and able to act independ- 
ently of other nations. To this end money must be stored 
up and agriculture stimulated, so as to furnish an abundant 
food supply. To the end that gold and silver might flow in, 
manufacture, foreign trade, and all industries that directly 
promoted manufacture and foreign trade must be encouraged. 

This was the national program of successive rulers during 
most of the time from Henry VII. (1485-1509) to George III. 
(1760-1820). All industries of individuals, companies, and 
colonies, which seemed to interfere with this program were 
rigorously repressed. 

The encouragement of English agriculture by the Corn 
Bounty Act of 1689 and by the Corn Laws of 1773; the 
encouragement of English trade, shipping, and sailors, by the 
Navigation Acts of 1651 and 1660; and the continual discour- 
agement of American manufacture, shipping, and transpor- 
tation ; find their fundamental explanation when considered 
as illustrations of this great national purpose. 
Society Sum- ^^ ^^^^ beginning of the period, industry con- 
Nat?<fnJi*Ad- tii^^^d to bc irregularly supervised by the 
^^om^s'tic''^ national authority, chiefly at the dictation of 
Period. local need and in accordance with the personal 
devices of the Crown for raising revenue. All trade and 



108 OUTLINES OF INDUSTRIAL HISTORY 

manufacture were considered to be proper subjects of practical 
control by petty regulations of various fraternities, themselves 
under the control of isolated town authorities. But long 
before the end of the period all industry, including agricul- 
ture, transportation, and many services, had been spurred, 
curbed, and turned to right and left by national authority for 
the sole purpose of securing a supposed advance in national 
welfare. 

Parliament was for a while eclipsed by the personality of 
the Tudor sovereigns (1485-1603), but at length asserted its 
supremacy by beheading Charles I. (1625-1649), deposing 
James II. (1685-1688), crowning William and Mary (1689- 
1702), and, as 1776 drew near, by so insisting on its superi- 
ority to colonial legislatures in America as to hasten the war 
for independence. 

Finally, when Henry VII. became king, in 1485, the towns 
had not yet become, in fact, subordinate to the national 
authority in a great number of most important economic and 
political functions, but in 1760, when George III. was 
crowned, not only had England become a centralized power 
within itself and become united with Scotland, but Wolfe had 
just crowned the enterprise and daring of English colonists by 
wresting the control of North America from the hand of the 
French commander Montcalm on the Heights of Abraham, 
and Clive had recently begun "the Empire of England in the 
East" by his great victory at Plassey.^ 

A great confiscation of the lands held by the 
monasteries followed their suppression by Henry 
VIII. These estates, together with many of the personal 
estates of the king, were bought up by the wealthy traders. 
Thus a great accession was made to the landlord class from 
the hitherto socially inferior middle classes.^ 

Under Charles II. (1660-1685) also, the old feudal conditions 
of military service were ended, and for all free-holders feudal 

^Green (J. R.), P- 754. 
^Gamier, vol. I, p. 37. 



THE DOMESTIC PERIOD IN ENGLAND 109 

tenancy was converted for all practical purposes into full 
ownership.^ Successors to the old feudal tenants were like- 
wise becoming as secure in their tenancies as if they were 
absolute owners.^ 

Unrestricted right to dispose of land did not exist, but the 
use and enjoyment of it became, during this period aa never 
before, a mere matter of contract, unhampered by feudal cus- 
tom. The men who could pay the most money could hence- 
forth practically own a piece of land. In such a contest a 
relatively small number of men came to own, so far as Eng- 
lish laws allowed ownership, all the land, just as under the 
feudal system there was a comparatively small number of lords 
of manors. But there was now this difference. Under the 
newer form of holding land all not owners in this partial sense 
had to make a further bargain, in competition with everybody 
else who wanted land, for a chance either to cultivate or to 
live upon it. Under the older form nearly everybody had 
by custom enough land upon which to live, and usually also 
some land to cultivate. 

During this period capitalistic production was of 

Capitalists. . . . , ^. »,i.., 

increasing importance. Signs of this fact 
abound. Larger investments were required for the herring 
fleet and for the distant cod-fisheries of Newfoundland. 
Large sheep-farms could pasture hundreds and even thousands 
of sheep. (In 1534, Parliament forbade any one man to 
keep more than two thousand sheep. ^) The iron and coal 
mines also required a greater outlay in tools and auxiliary 
material, as they were more extensively worked. Coaches and 
carts and shipping for transportation meant capitalistic invest- 
ment as a rule. The same was true of canals. The traders also 
made investments in goods which were carried by caravans and 

'Sato, History of the Land Question in the United States, p. 15 
— Johns Hopkins University Studies, 4th series, 1886. 

^Pollock, Tlie Land Laws, p. 49 — English Citizen series, 1883, 
The Macmillan Co., New York. 

^Ashley, vol. II, p. 268, 



110 OUTLINES OF INDUSTRIAL HISTORY 

sailing vessels to distant lands, so that returns on the invest- 
ments were delayed for months and sometimes years. 

These examples, and many more that might be given, 
should serve to make clear the fact that capital was playing an 
increasingly important pai't in the production of this period. 
As a consequence, therefore, an increasing number of men and 
women were becoming dependent upon those who had capital, 
for a chance to work. 

The loan funds of the time were also greatly increased and 
concentrated in the Bank of England. Thus borrowing, both 
for productive purposes and for luxurious living, yes, even for 
vice and war, became easier. In these loan funds was 
gradually developed the power of the nation and of its gi'eat 
traders, to turn the energies of large bodies of men quickly in 
this direction or in that as tlio political exigencies of the time 
or the possibilities of economic gain required. 

A reasonable interest on such funds, even where the lender 

did not become a partner in the enterprise and therefore a 

sharer in the risk, was, during the sixteenth century, for the 

first time thought by English religious teachers to be right. ^ 

With the increase in the importance of capital in 

Undertakers. , , o i /. •»•,•• 

the form of tools, of transportation facilities, of 
raw materials, of finished proaucts (lacking only the addition 
of time and place utilities before they became consumer's goods 
in the possession of consumer), and with the increase of 
capital in the form of loan funds, the economic importance of 
undertakers vras also becoming greater during this period. Just 
so far as the various processes of the textile manufactures were 
divided up and assigned to different groups of workers, was 
the function of the undertaker necessary to unify the different 
partial processes into one continuous and well-adjusted com- 
plete process of manufacturing an article for the consumer's 
need. Just so far as the capital invested was large, markets 
distant and uncertain, loan funds available for great under- 
takings, and prizes possible to the enterprising and successful 

^Ashley, ch. vi. 



THE DOMESTIC PERIOD IN ENGLAND 111 

trader, — so far was the special ability of the undertaker nec- 
essary to trade. And, finally, it was to the far-sighted under- 
takers, who saw what facilities for the transportation of coal 
and other heavy commodities would do for England, that the 
inauguration of the great system of canals was primarily 
due. Plainly enough the industrial undertakers had already 
begun to direct that combination of natural resources, 
labor, and that storage battery of human energy which is 
formed by the union of land and labor, and is called capital, 
which was to be so remarkable during the nineteenth century. 
^. ^ , The most significant fact about the common 

Directed <= 

Workers, laborers of this period is probably that money 
wages were becoming universal. The method of determining 
these Triages, hov/ever, had not yet become so impersonal, so 
purely competitive, so absolutely regardless of any relation 
between employer and em.ployed except the "Cash Nexus," as 
Carlyle calls it, as has been the rule during the period of the 
Factory System. V/ages had all along been affected by society 
through custom, by regulations of gilds, by town ordinances, 
by national statute, and by local justices of the peace. Often 
too, no doubt, these interferences with the wage-contract were 
dictated by the employers for their own v/elfare rather than by 
the wage-workers for the welfare of the laborer. Still, 
employers and employed were commonly neighbors, and the 
number of employees of any one man was small, so that it was 
usually possible for him to know them all personally. If a 
workman's family was sick and in distress the employer was 
likely to know of it.^ Some compensation through personal 
relations was therefore possible for the frequent unfairness in 
wages. 

As the wage system grew up in England, to take the place 
of the old feudal relations between persons and to make men 
personally free, the bonds of personality were yet strong so 
long as employer and employed were permanent members of 
the same community. But this primitive form of the wage 

iTaylor, p. 37. 



112 OUTLINES OF INDUSTRIAL HISTORY 

system was now breaking up to the extent tliat the Domestic 
System of industry, with its uncertain markets, capitalistic 
production, and competing undertakers, was gaining a 
dominant place in the various industries of the time. In the 
woolen industry, and the textile industries in general, we have 
seen this domination to be well-nigh complete, while in many 
other industries it was still only partial. The wage system 
had become common, and the way was already open for its 
complete development on strictly competitive lines just as 
soon as the introduction of the Factory System of industry 
should render such development necessary to the greatest suc- 
cess of the capitalistic employer. 
The Right of In othcr kinds of property than land the gradual 

Private Prop- . . » , i (• j t j? i 

erty and Free- emancipation of the person of the serf has 

domof . 1 -^1 •, • . -i. • J.1, 

Contract, camcd With it ail increasing security in tne 
possession of property. Magna Charta contained only one 
safeguard for the property of a villein,^ and the safeguards for 
the property of freemen were rather negative than positive — no 
"scutage" or "aid" was to be taken except for definite purposes, 
but by implication certain other dues not specified might be 
taken.2 When Edward I. (1272-1307) confirmed the Charter 
in the closing years of the thirteenth century, this liability 
of property to arbitrary taxation by the king was greatly 
restricted and made dependent upon the will of Parliament. 
Other steps toward freeing property from the danger of arbi- 
trary taxation were taken during the memorable struggle 
between Charles I. and Parliament, and again when William 
and Mary became king and queen by act of Parliament in 
1689. In theory, henceforth, all interference with private 
property and contract was to be in accordance with the will 
of the people, as expressed by their representatives in Par- 
liament. What classes of the people were dominant in 

iStubbs, Select Charters, p. 299 — 1870, The Clarendon Press, 
London. 
"The same, sections 12, 30, 28-32, 38-40, of Magna Charta, 



THE DOMESTIC PERIOD IN AMERICA 113 

Parliament, therefore, was of fundamental importance in con- 
nection with the question of taxation of private property and 
interference with individual contracts. 

How agriculture, shipping, trade — all industries considered 
important — were stimulated, held back, and turned into new 
channels by the mercantilist policy of Parliament to build up 
a great national power has already been suggested. When 
this policy is recalled to mind now it will be seen at once how 
dependent upon society in the form of the national govern- 
ment individuals were, in respect to the value of their prop- 
erty, and the conditions of their making business contracts 
with each other. 

In theory, all Englishmen had become able to hold private 
property, in everything except land, with the three implica- 
tions of use, enjoyment, and alienation. In practice, the 
economic policy of the government often caused a violent 
interference with each phase of this right. 

In addition to the contracts which result from the right to 
dispose of one's property in goods, or to buy the goods of 
another, is the wage contract. In theory this was still subject to 
regulation in a given locality by the officers named by Parlia- 
ment, but in practice it v/as coming more and more to be left 
to employers and employees themselves. 

AMERICA 

Limits of the As English colonization of America did not 
begin in earnest until 1607 in Virginia and 1620 
in New England, it will be seen at once that the Domestic 
System of industry could not have begun so early, by at least 
a hundred years, in America as in England. On the other 
hand, it did not give place to the Factory System so early as 
in England, partly on account of adverse English legislation. 
Perhaps the most convenient limit for our present purpose 
will, therefore, be the beginning of our national life under the 
Constitution in 1789. 



114 OUTLINES OF INDUSTRIAL HISTORY 

During this period the thirteen colonies were 

*in^Tias"of ' planted upon the Atlantic margin of the con- 

popuiation: and tineut. How thev struck their roots into the soil, 

Westward Mi- •' ' 

*settiers°'^ developed local democratic institutions, became 
conscious of each other's presence and of their 
common relations to England ; how they helped England to con- 
quer Erance; and how, at length, they drew closer together, 
and by the aid of this same France, won their political inde- 
pendence ; — all this has been a familiar tale at every American 
fireside for more than a hundred years. By 1790, therefore, 
the scouts of the westward moving army of settlers had passed 
beyond the lower waterfalls of the Atlantic rivers, where they 
had first paused, had been overtaken by detachments from 
the main body of settlers upon the tablelands of the eastern 
Appalachian slopes, and had pushed on over the mountains and 
down the Ohio Kiver. Parts of what is now Tennessee, Ken- 
tucky, Ohio, Indiana, and Illinois were thus early familiar to 
these pioneers. Indeed, one of the least known but most thrill- 
ing and important campaigns of the whole Eevolutionary War 
was that of George Rogers Clark of Virginia, who gained from 
the British for the United States a title to the whole Northwest 
Territory by his brilliant conquest of Kaskaskia and Cahokia 
upon the Mississippi, and Fort Vincennes upon the Wabash.^ 
In 1790 the first national census was taken and the popula- 
tion found to be 3,929,214, about the number now living in 
the city of Greater Now York. Of these only about three and 
one-third per cent lived in towns or cities of 8,000 inhabit- 
ants. The most thickly settled areas were those along the 
lower slopes of navigable rivers. 

tip to the time of the Eevolution, all land titles 
in the Colonies, as in England, had their legal 
source in the Crown. In practice those individuals and 
^Turner. Compare also Hart, American History Told by Con- 
temporaries, vols. I and II — Longmans, Green, & Co., New York. 

^Roosevelt, The Winning of the West, vol. II, chs. ii, iii— 1889- 
1896. G. P. Putnam's Sons, New York. 
^Sato. 



THE DOMESTIC PERIOD IN AMERICA 115 

groups of individuals who could maintain themselves against 
the Indians and appropriate certain areas for their own use 
were not usually interfered with. "In all the colonies lands 
were cheap and the actual occupant or settler was preferred 
and protected."^ As a rule, this process was facilitated by 
certain companies and proprietors to whom various sovereigns 
had given charters, often duplicate, to vast areas of land. 
"All the royal charters, beginning with the charter to the 
Virginia Company in 1606 and ending with that granted to 
the trustees of Georgia in 1732, granted lands in free and com- 
mon socage, that is, in free tenure without military service." ^ 
Sometimes the payment in return for these grants was a price 
once for all, as in the case of Penn; sometimes it was a rent; 
and sometimes a share in profits. "Profits, however, there 
were none, and rents were small."* But whether the occu- 
pancy of the land by individuals was authorized, for a nominal 
return, directly by the Crown, by the original companies, by 
proprietors, by later municipal or colonial authorities, or sim- 
ply was gained from the Indians, as in the case of settlers in 
Connecticut and Ehode Island, the fundamental fact was that 
a continent of unappropriated land invited settlement, and 
possession became more than nine points in the law. 

The settlers were, as a rule, free men; and the practical 
ownership of as much land as they could work was easy. 

"In 1651 it was enacted that all colonies should 
*iish'?ndusS?a]' ©xport Only to England such products as they had 
K^sTectfng tiie *^ ^®^^' ^^^ should scud them in English- built 
^1651-1750*.^ s^ips- In 1660 the import trade was similarly 
limited. In 1672 taxes were imposed on the trade 
between the different colonies. In 1697 the exportation of 
wool, yarn, or woolen manufactures to any place whatever 

^Donaldson, The Public Domain, Its History, with Statistics, p. 
467—1884, U. S. Government Publications. 

'Sato, p. 16. 

^Hinsdale, Tlie Avierican Government, p. 26— 3d ed., 1895, The 
Werner School Book Co., Chicago. 

*The same. 



116 OUTLINES OF INDUSTRIAL HISTORY 

was prohibited. In 1719 the House of Commons condemned 
all American manufactures as tending to independence. In 
1732 the exportation of hats was forbidden; and in 1750 
rolling mills, iron furnaces, and forges were declared nuisances 
to be suppressed by the colonial governors. The finest pine 
trees in the forests were marked with the 'broad arrow,' 
denoting that they had been selected as masts for the King's 
ships, and that they must not be cut by the lumbermen. 
Even Lord Chatham said that in a probable contingency he 
would not allow the colonies to make a hobnail." ^ 

How the attempt at rigid enforcement of these and similar 
laws after 1760 directly hastened the struggle for independ- 
ence, is more than a twice-told tale. But, previous to 1760, 
however repressive in intention, it is doubtful if, on the 
whole, they did much to retard the development of colonial 
manufacture and trade that might otherwise have taken 
place. Still, against such a background of adverse economic 
legislation the whole industrial life of the period must be 
drawn. 

Extractive In- Until withiu a decade or two there has been a 
**and^GrizTn|* frontier in this country, roughly separating 
Animals.' lands belonging to Indians upon the west and 
the most advanced permanent white settlements upon the 
east. Beyond this frontier the fur dealer pioneered his way 
along water courses and Indian trails to barter all kinds of 
goods dear to the Indian heart for the valuable furs which 
the Indian knew best how to secure. This frontier has been 
utilized, since long before the close of the eighteenth century, 
for gi-azing large herds of cattle and horses. In early times 
this was especially true on the western frontier of the south- 
ern states, Virginia and the Cai'olinas. The lack of large 
markets during the eighteenth century set a limit to the 

•Hinsdale, pp. 59, 60. 

'For a popular account of the industrial life of one hundred 
years ago, see McMaster, Century of Social Betterment — "The At- 
lantic Monthly," vol. 79, pp. 20 and following. 



THE DOMESTIC PERIOD IN AMERICA 117 

grazing industry during the period now under consideration, 
but furs were of so much importance for export that the con- 
test between France and England for the control of North 
America was to a great degree occasioned by the desire of 
each to control this trade. 

Agriculture for subsistence, for comparatively 

Extractive In- " „ , _ . , . ' , , . 

dustries: Small local markets, and tor export was by far 
the most important industry throughout the 
period. The small farms of intensive agriculture in the 
north, and the large estates of extensive agriculture in the south, 
were typical for those localities. The cereals long known in 
England, also maize, tobacco, the potato, rice, hemp, flax, 
cotton, and the grasses, were the most important crops. 

Methods of tillage were primitive, the art of fertilization 
almost unknown, and the varieties of farm products, both 
vegetable and animal, as yet little improved by culture and 
breeding. Yet so abundant was the unexhausted land that 
in 1791 there were exported 619,681 barrels of flour and over 
1,000,000 bushels of wheat. ^ Tobacco was also a constant 
export product. 

Extractive In- ^vcr most of the territory settled, a reckless 
Lumberfng* and "slashing and burning" of timber had to pre- 
Fishins. qq^q agriculturc. So far as the forests were 
concerned this was an absolute waste which has been repeated 
in new sections of the country until it has become well-nigh 
criminal. Lumber was also gotten out for buildings, for 
native ships, and for exportation. So important did the 
export of lumber become that "in 1792, 65,846,024 feet of 
lumber, 80,813,357 shingles, 32,039,707 hoops, staves, and 
headings were exported, while of timber, consisting of ship 
and other timbers, frames of houses, etc., large quantities 
were sent out,"^ Various other products of the forests, such 
as pitch, tar, and soap-ashes also formed a less important 
class of early exports. 

'Wright, p. 74. 
*The same, p. 73. 



118 OUTLINES OF INDUSTRIAL HISTORY 

But the fundamental industry on the New England coast 
was fishing, and the most valuable of all the fish taken was 
the cod, which was exported in great quantities to Catholic 
countries. We are told that before 1640, "the free inter- 
course with the West Indies and the Western Islands, and the 
large trade with the great Catholic consumers of fish, had 
developed a vigorous commerce on the shores of New Eng- 
land."^ And again, "the business of the fisheries enters 
into all the doings of the time." ^ Finally, "it was recognized 
at home that the English fisheries of Newfoundland were the 
greatest if not the only nursery for English seamen. When 
that trade flourished, it bred 10,000 seamen in a single year. 
The colonial fisheries were performing a like office, and were 
training a maritime people destined to acquire wealth, and to 
make a navy which in due season might compete with the 
royal power upon the seas." ' 

Iron was the principal metal worked during the 

extractive In- , . , . , t , . , . , . 

dustries: colouial penod, and this was obtained in most 

of the colonies from bog-iron ore, a form of 

ore that was deposited by water in swamps, at the bottoms 

of ponds, etc. This was so far utilized that, although the 

colonists imported much iron and steel in a form ready for 

use, they exported in 1771 over 7,525 tons of pig and bar iron.* 

This product went chiefly to England, and the tonnage just 

given was the maximum for any one year. 

Transforming As we havc already seen, most of the people in 

variety^and the colonics Were cultivators of the soil. As a 

\aiue. ^^^^ these farms, plantations, and local groups 

of whatever sort were also largely self-sufficing in respect to 

rude manufactured articles. "English manufactures began 

in the home; there were few dwelling-houses in the rural 

parts of England in the seventeenth century which did not 

'Weeden, vol. I, p. 164. 
^The same, p. 247. 
'The same, p. 245. 
^Wright, p. 101. 



THE DOMESTIC PERIOD IN AMERICA 119 

contain a spinning-wlieel or a weaver's frame. The busy 
hum of the one and the measured rattle of the other were 
heard in nearly every household. How natural, then, to 
expect to find in the homes of the Virginians of the same 
period men and women, who, in many instances, had been 
born in the mother country, and who clung to the habits as well 
as to the traditions of their race — [and] rude appliances for the 
plainest manufactures to cover their simplest material needs." ^ 
This household manufacture for home use was especially 
unlikely in Virginia, where tobacco could always be traded for 
goods sent directly from England. Still we are told that 
"there is no reason to think that in any year or series of 
years, however prosperous, the manufacture of woolen gar- 
ments for rough domestic use fell into abeyance. From the 
middle of the [seventeenth] century to the close, there are 
few inventories of large personal estates among the items of 
which wool-cards and woolen-wheels do not appear."^ The 
same authority enumerates the following kinds of manufac- 
ture as commonly performed upon the Virginia plantations : 
carpentry, joining, blacksmithing, coopering, tanning, shoe- 
making, etc., in fact, nearly all of the transforming processes 
absolutely necessary to the rural life of the time. In Vir- 
ginia, however, all articles of manufacture other than the 
coarsest and absolutely necessary were brought from England 
in return for tobacco. 

In New England, likewise, we are told of the period includ- 
ing the middle of the eighteenth century: "Manufactures 
proper, during our present period, show little that is new or 
interesting in their development. They range in importance 
from woolen homespun through rum and iron to flaxen 
fabrics, and a few attempts at making various necessaries. 
The manufacture and use of homespun woolen cloth — such a 
prime necessity — was so thoroughly incorporated in the 



»Bruce, vol. II, pp. 398, 399. 
"The same, pp. 468, 469. 



120 OUTLINES OF INDUSTRIAL HISTORY 

domestic habits of the people that its relative industrial 
importance escaped much especial notice."* These home 
industries for domestic and narrowly local consumption were in 
their very nature affected to a minimum extent by adverse 
English legislation of whatever sort. In comparison with 
manufacture for export they must be thought of as of mani- 
fold greater importance and value throughout the whole colo- 
nial period. Mr. Wright makes the best possible comparison, 
but yet says that it is little better than a guess. Still, such a 
guess is interesting, and is recorded here for what it is worth. 
"Eeasoning from such facts as are obtainable, it is probable 
that the manufactures of the United States at the close of 
the colonial period amounted to about $20,000,000."" Of 
these manufactures Mr. Wright estimates the value of exported 
goods to be about $1,000,000. 

In variety, these manufactures were determined by the 
primary needs of colonists for food, clothing, and shelter, of 
slowly improving quality and variety ; by a gradually increas- 
ing interchange of products between colonists in different 
latitudes along the coast; and by the minimum foreign 
market secured in spite of adverse English legislation. 
Transforming Such tools and machinery and motive power as 
To<Jis.'^Machin- Were kuown in England previous to the great 
ery, Etc.^ jnventions of the eighteenth century were known 
and used in the colonies. All tools and machines were as yet 
simple and usually made by hand. Most of them were also 
moved by the human hand. Other motive power was fur- 
nished by animals, by the wind, and by the numerous streams 
of the Atlantic slope. Sawmills were used in the colonies 
early in the seventeenth century, and became very common 
before its close. Local gristmills were common in New Eng- 
land long before 1650. "In 1649 there were five water mills 
in Virginia, four windmills, and a great number of horse and 

iWeeden, vol. II, pp. 678, 679. 

"Wright, p. 103. 

'Consult Wright, chs. vii and viii; Weeden, index; also Bruce. 



THE DOMESTIC PERIOD IN AMERICA 1^1 

hand mills." These rapidly increased toward the close of 
the century, and fulling mills for cloth were added. In New 
England, during the last quarter of the seventeenth century, 
"fulling mills were steadily established to dress the homespun 
cloth." 

Various machines and appliances for working iron were 
also introduced into many of the colonies during the 
last half of the seventeenth century and during the eight- 
eenth. Furnaces, forges, foundries, rolling mills, nail 
works, and wire mills were the most common, and these 
were found in the largest numbers in Pennsylvania and 
Massachusetts. 

Printing presses and paper mills were gradually set up, 
especially in Boston and Philadelphia. Cambridge, Massa- 
chusetts possessed the first colonial printing press, in 1639. 
Georgia was the last colony to begin printing, the first press 
being set up in Savannah in 1762. 

These larger mills and machines were used in great part to 
supplement the work of individuals upon the materials 
destined for home consumption. Illustrations of this are to 
be found in the gristmills which ground the grain of a com- 
munity for toll, and in the fulling mills, which performed a 
similar service in thickening cloth spun and woven in the 
several homes and afterwards to be made into garments by the 
same hands. 

Sometimes, also, they were used to furnish materials to the 
home workers, as in the case of rolling and slitting mills, 
which rolled iron into sheets and then slit the sheets into 
rods, which were made into nails on a hand anvil by many a 
farmer on winter evenings. 

And, finally, these mills were sometimes the property of 
men who produced for a market as well as rendered assistance 
to home industry. Lumber, pig and bar iron, and potash 
have already been mentioned as articles of export. Cloth also 
was finally produced in the older parts of the colonies in such 
quantities as to be sent to the frontier. 



122 OUTLINES OF INDUSTRIAL HISTORY 

Transforming These scautj illustrations suggest the main 
Tbe Domestic facts respecting the transforming industries of 
System. ^^^ whole colonial period. Almost the whole of 
such industry was of the early type called in Chapter I the 
Home System of industry. Home production for home 
consumption was the rule. Wherever the work of a household 
needed to be supplemented by larger and more expensive 
machines, a greater motive power, or the cooperation of a 
larger number of persons, this supplementary work was done 
in the immediate vicinity of most of the homes, sometimes 
under the immediate direction of the town authorities and 
sometimes by small capitalists. The same was true of the 
small amount of manufacture for a market. So far as the 
transforming industries of the time were not for home con- 
sumption, they were characterized more nearly by the methods 
of the Domestic System of industry than by any other. 
Spinning, weaving, and making of shoes and garments went 
on in the homes of the workers or in the small shops of 
master workmen. All transforming industries were closely 
associated with agriculture. There was no social gulf fixed 
between the employer and the employed. Tools and 
machinery were as yet comparatively simple, and did not 
bring together a large number of persons or allow of minute 
division of labor. Artisans in a particular industry were too 
few in any locality to give much opportunity for the elaborate 
gild regulations which had formerly existed in England. 
The Gild System of industry had no general development in 
America. So far as there was production for a market, 
therefore, our industries passed at once from the Home 
System to the Domestic System, and thence to the Factory 
System, which remains to be described in the next chapter. 
Transporta- Throughout the whole of this period the trans- 
tion.» portation of most merchandise was by water. 
This was all the easier because most of the population lived near 
the coast or near the Atlantic rivers. In Virginia, boats often 

'Consult Weeden, index ; also Bruce. 



THE DOMESTIC PERIOD IN AMERICA 123 

came from England directly to the wharves of a plantation. 
"All the maritime places had nimble trading shallops flitting 
about the coast. " This was in the last half of the seventeenth 
century, and must be thought of as, in the main, continuous 
throughout the period. 

Travel upon land was all the while comparatively slow and 
difficult. Eoads were looked after chiefly by town authorities 
which compelled the townsmen to work for a certain number 
of days annually — usually in proportion to their property — 
upon the highways. Streams were at first crossed by ferries, 
then by rude bridges for footmen and horses only, then, after 
about 1675, cart-bridges became common. These were 
usually built by several towns acting together, and later by 
county authority; and tolls were collected for passage. 
Boston had its first coach in 1669. At the end of the seven- 
teenth century, "the post from Boston to New York took one 
week in summer ; in the winter it went only once in a fort- 
night. About the beginning of the [next] century nearly all 
the modern roads were already laid out and the use of carts 
became general." This applies especially to the older and 
more thickly settled parts of the colonies. "In the far away 
districts, chaises were a curiosity. Judge Paine passed 
through Wells, Maine, in one in 1755. All the village 
thronged to Kimble's tavern to see it." ^ 

On the whole, both domestic and foreign transportation of 
goods was to a great extent in the hands of traders and 
producers rather than of men who carried simply for hire. 
Still, there continually were instances of the latter. The 
following description of the seventeenth century "Yankee 
coasting skipper" illustrates what has just been said: "Gener- 
ally part owner of vessel and cargo, always a trader and 
adventurer, he went from port to port beyond control of 
owners, who would not have directed him if they could. All 
the coast harbors, Milford, New London, Newport, Ply- 
mouth, Boston, Salem, Portsmouth, sent out and received 

iWeeden, vol. II, p. 693. 



124 OUTLINES OF INDUSTRIAL HISTORY 

these busy ketches and shallops, — transient hucksters of the 
sea. Skipper and boy often made the crew ; if a sailor was 
added, he often carried a venture of his own, trading his way 
upwai'd into mastership and ownership. The mackerel craft 
of the summer, in winter coasted among the southern colonies 
trading lumber and fish for grain and flour." ^ Some of these 
small vessels, in spite of navigation laws and petty colonial 
restrictions, not only went to the ports of the southern colo- 
nies, but penetrated to the West Indies, to Spain, Portugal, 
Gibraltar, England, and even to Guinea, Madagascar, and 
Syria. 

The difference in cost between land and water transportation 
is well illustrated by the charges on wheat shipped from 
Northampton to Boston in 1669. For hauling from North- 
ampton to the Connecticut Eiver, one shilling was paid; 
thence down the river and along the coast, around Cape Cod, 
only eight pence. Thus the first two miles by land cost 
more than half the total freight charge from farm to market. 
Cattle and poultry were often driven to the larger towns, as we 
have seen was common in England. 

To such limited, slow, and uncertain means of transportation 
as have been suggested, was the merchandise of the whole 
colonial period subjected. 

The difficulties which passengers had to undergo, even 
toward the close of the period, are summed up very well by 
Benjamin Franklin, in 1754, in giving his reasons for fixing 
upon Philadelphia as a place of meeting for a Congress com- 
posed of delegates from all the colonies. These difficulties 
were not greatly lessened during the interval which elapsed 
before Washington made his journey on horseback from 
Mount Vernon to New York, in 1789, to be inaugurated Presi- 
dent of the United States. Franklin writes thus: "Phila- 
delphia was named as being nearer the center of the colonies, 
where the commissioners would be well and cheaply accom- 
modated. The highroads, through the whole extent, are for 

»Weeden, vol. I, pp. 259, 360. 



THE DOMESTIC PERIOD IN AMERICA 125 

the most part very good, in which forty or fifty miles a day 
may very well be, and frequently are, traveled. Great part 
of the way may likewise be gone by water. In summer time, 
the passages are frequently performed in a week from Charles- 
ton to Philadelphia and New York ; and from Rhode Island to 
New York, through the Sound, in two or three days; and 
from New York to Philadelphia, by water and land, in two 
days, by stage, boats, and wheel-carriages that set out every 
other day. The journey from Charleston to Philadelphia may 
likewise be facilitated by boats running up Chesapeake Bay 
three hundred miles. But if the whole journey be performed 
on horseback, the most distant members, viz., the two from 
New Hampshire and from South Carolina, may probably 
render themselves at Philadelphia in fifteen or twenty days ; 
the majority may be there in much less time." ^ 

Barter played a very important part in both 
domestic and foreign trade throughout the 
period. Virginia had almost no money but tobacco for nearly 
a century. Other colonies had comparatively little metallic 
money, and what they did have was usually picked up from 
all the nations with which they had any intercourse. Massa- 
chusetts had a mint of her own for thirty years in the seven- 
teenth century. Beaver, wool, and wampum were for a time 
commonly used as currency in the New Netherlands and 
Rhode Island. The forms of money current in one colony 
were discounted in another. Financial chaos prevailed 
throughout the colonies. "The modern fluidity of buying 
and selling, the movement through quick prices and in ready 
money was wanting in large as well as small transactions. 
Merchandise was present in negotiation, not only symbolized 
as in a money or currency, but in actual bulk and weight. 
Men bartered peltry, wampum or corn in terms of money. 
Taxes were levied, not in solid coin or its paper represent- 

iThe Old South Leaflets, No. 9, pp. 4, 5— Directors of the Old South 
Work, Boston. 
^See Weeden, index ; also Bruce. 



126 OUTLINES OF INDUSTRIAL HISTORY 

atives, but in farm produce, 'country pay.' . . . One of the 
pinching wants of the time was not only for quicker capital and 
more money, but for a better currency of that which they had. " ^ 

Bills of exchange were very common, especially in Virginia. 
A merchant, in buying a cargo of tobacco from a planter, 
gave him in pay an order on another merchant in England. 
The planter then sent this order to the English merchant 
authorizing him to send to Virginia its value in various com- 
modities. 

In spite, therefore, of all inconveniences arising from the 
scarcity of money, its gi'eat variety and uncertain values ; in spite 
of petty regulations of all sorts ; in spite of adverse legislation 
respecting manufacture and transportation ; and in spite of the 
universal prevalence of the mercantilist theory regarding 
trade ; there grew up in the colonies a remarkably shi'ewd and 
enterprising body of intercolonial and foreign traders, who 
were ready, whenever the political conditions should become 
favorable, to push the trade of the colonies and of the United 
States into all ports that offered a market for their products 
or that produced goods which they desired to import. 

The number of ships from a single colony engaged in the 
cod-fisheries, and the number of ships built in all the colonies 
in a single year, will give some suggestion of the activity of 
this later colonial trade. From Massachusetts alone, "from 
1765 to 1775 there were sent out 665 vessels annually, 25,630 
tons, with 4,405 men. They furnished for Europe 178,800 
quintals at 3.5 dollars; for the West Indies, 172,500 quintals 
at 2.6 dollars." ^ In ship-building, "The account for all the 
colonies for the year 1769, the only year for which a summary 
is found, at least just prior to the Revolution, shows that 389 
vessels had been built, having an aggregate of 20,000 tons 
burden. Of these New Hampshire built 45 ; Massachusetts, 
137; Rhode Island, 39; Connecticut, 50; New York, 19; the 
Jerseys, 4; Pennsylvania, 22; Maryland, 20; Virginia, 27; 

'Weeden, vol. I, pp. 314, 315. 
2The same, vol. II, p. 832. 



THE DOMESTIC PERIOD IN AMERICA 127 

North Carolina, 12; South Carolina, 12; Georgia, 2. The 
whole number of vessels built in all the colonies in the year 
1772 was 182."^ 

The personal and domestic servants were of two 
main classes, slaves and indentured servants. 
The last class consisted of persons who could not pay their 
fare to the colonies, of English criminals, and of colonial 
orphans, debtors, and criminals. All these were bound to 
service, some voluntarily in return for transportation and 
maintenance, and others by compulsion, for a longer or 
shorter term of years. The usual term was from three to six 
years, although occasionally for life. With the exception of 
those indented for life, these servants were not slaves, and 
usually, upon the expiration of their term, became substantial 
citizens and property holders. The proportion of criminals 
was small. Most of those who came voluntarily were persons 
who, owing to the Elizabethan Statutes of Apprentices, to the 
assessment of low wages by justices of the peace, and to their 
inability to seek work in other parishes unless they could 
guarantee that they would not become public charges, were 
unable to support themselves in England, and had no means 
to pay their way to America. "In 1671 there were six thou- 
sand servants and two thousand slaves" in Virginia. During 
the eighteenth century, the importance of this class of servants 
declined. In recent years the Italian Padrone System and the 
Six Companies for importation of Chinese laborers are per- 
versions of this old system of labor. 

The history of negro slavery in America is too familiar to be 
mentioned further here than to state that, in 1790, there were 
already 697,897 slaves in the United States. Of these only 
40,370 were scattered over 'New York, Pennsylvania, New 
Jersey, and the New England States. 

Of other forms of service little can here be said. Life was 
simple. Music, art, the drama, and literature took the time of 

iWright, pp. 41, 43. 

'Consult Bruce, ch. ix; also Weeden, index. 



128 OUTLINES OF INDUSTRIAL HISTORY 

a very small proportion of the population, even in the largest 
towns, at the close of the period. The physician rode on horse- 
back, carrying his own medicines in his saddlebags, to towns- 
man and remote farmer alike. In New England, the minister 
was the social and intellectual leader. In education, Harvard, 
Yale, and William and Mary College in Virginia, were pioneers. 
The public school system of the United States was already 
begun in Massachusetts in 1647, when each town of fifty 
householders was ordered by law to support a school in "which 
reading and wi'iting should be taught, and towns of one hun- 
dred householders must set up a grammar school which should 
fit young men for the university. 

Of the political services that were rendered during this 
period the mere mention of Samuel Adams, Patrick Henry, 
Washington, the Continental Congresses, Articles of Con- 
federation, and the Constitution must suffice as a reminder. 

Emerson has told us that America and oppor- 

Dependents. , ., tj. t. i i. 

tunity are synonymous, it has always been so 
regarded. The great abundance of cheap land, the slavery and 
indentured servant system, and the sterling character of 
the colonists prevented most persons from becoming eco- 
nomic burdens upon the public, either as paupers or as wilful 
parasites. Of the poor in New England, Mr. Weeden says : 
*'The few paupers existing under the favorable conditions of 
life in our towns were made comfortable and supported care- 
fully at the public expense." ^ The problem of the poor had 
not yet become a national question, nor even a state or 
colonial question in America. 

The systems of landholding in different colonies 

Landlords. 

varied in detail, but everywhere traces of Eng- 
lish ideas, modified somewhat to suit the new conditions, 
appeared. Examples of this importation of English methods 
of landholding are found in the feudal theory that all land 
titles had their source in the Crown ; in the common New 
England practice of having homesteads in severalty and at the 

iVol. II, p. 696. 



THE DOMESTIC PERIOD IN AMERICA 129 

same time commonage, or associated possession of tillage, 
pasture, and woodlands; and in the manors of 'New York, 
New Jersey, Delaware, and other colonies. In spite, how- 
ever, of this persistence of Old World ideas, the personal free- 
dom of the colonists and the fact of the superabundance of 
unoccupied land made it remarkably easy, in comparison with 
England, for most men in the colonies to be their own land- 
lords. The fact of the existence from the first of an unusually 
large percentage of free landowners in this country can not be 
held in mind too constantly. 

Capital, both in the form of tools and machinery 

Capitalists. r 1 j 

and of loan funds, was limited throughout the 

period. Still, there was capitalistic production of all sorts, 
agriculture, mining, fishing, manufacture, transportation, and 
trade. The amount of capital necessary for any venture was 
comparatively small, and the hope of one day taking part in 
production as a capitalist as well as a laborer was in the heart 
of every young man. Much of the colonization itself was in 
the nature of English investment of capital as well as of labor, 
and, throughout the period, Englishmen had more or less 
interest in many a colonial ship and trading venture. 

As for loan funds, the accounts of the efforts of the various 
colonies to do a banking business founded upon land values, 
commodities, and with fiat money, would be instructive read- 
ing to many American voters of to-day.^ 

The Yankee trader, in debt to an Englishman 

Undertakers. 

for the capital with which he bought his ship 
and rigging, to New England producers for his cargo, and 
plying between Boston and England with the expectation of 
gradually paying his debts in both places out of the profits of 
his business is a good type of the enterprise of the small 
manager of the time, whether operating with his own capital 
or that of others. He shrewdly smuggled desirable goods in 
violation of English and colonial laws, braved the perils of the 
sea in vessels smaller than our pleasure yachts, ran great risks 

*Weeden, chs. viii and xiii. 



130 OUTLINES OF INDUSTRIAL HISTORY 

of capture by pirates, and mastered the difficulties of trade by 
barter and by variable and insufficient currency. The 
qualities thus developed were the resourceful and frequently 
unscrupulous qualities of the typical industrial manager. 
When the lai'ger opportunities which came with greater cap- 
ital and steam manufacture and transportation were offered to 
such men, their development into the great captains of industry 
of to-day was certain. 

With the exceptions noted in the section on 

Ijaborerg. 

"Servants," common laborers were free men. 
And it must be remembered that the large class of indentured 
servants were as a rule only temporary exceptions, if excep- 
tions at all. Indeed, those who entered this condition 
voluntarily may perhaps best be regarded as wage-earners who 
were working a long time for a comparatively small wage paid 
them in transportation and maintenance. 

Especially in the north, continual efforts were at first made 
by colonial legislatures and town authorities to fix wages^ and 
then, when this failed, to regulate them by administration. 
Wages also were often paid in commodities. This continual 
interference with wages, coupled with the fact that a man 
could often get more commodities in a year by devoting him- 
self to agriculture than by plying his trade, discouraged 
manufacture and kept the number of skilled artisans small. 
The fisheries present many interesting examples of coopera- 
tion, as those who fitted out and manned a ship usually agreed 
upon certain shares of the catch as their reward. In the 
skilled occupations, apprenticeship prevailed. On the whole, 
wage-earners shared in the rude comfort of the period in spite 
of all attempts to restrict and regulate wages. 

Society: The Of courso slavcs owned no property and were 

Pru^L^eVrop- theuiselves merely chattels of others. Free men 
Freedom owucd all kinds of property that were then in 

of Contract, gxisteucc, subjcct Only to the manifold inter- 
ferences of society through the agency of colonial and English 

'See Weeden, index; also Bruce. 



THE DOMESTIC PERIOD IN AMERICA 131 

customs, legislation, and administration. In the case of land, 
we have already seen that full ownership was practically enjoyed. 
In Virginia, tracts of twenty thousand and thirty thousand acres 
were sometimes in the possession of one man. We have also 
seen that in New England, in addition to private ownership 
of land, there was also in most towns social ownership of 
tillage, pasture, and woodland. Both private and social land 
was often used and cultivated in accordance with many regu- 
lations supposedly demanded by the social welfare. The size 
of breeding horses, the varieties of farm products, and the 
number of animals each man could pasture upon the common 
lands, were considered proper subjects for the consideration 
and action of town authorities. 

In regard to property other than land, the regulations of 
society by means of English laws have already been men- 
tioned. In addition, there was nothing a man possessed that 
was not at some time in some colony interfered with by society 
through the public authorities. The size and style of houses, 
materials and style of clothing, varieties of food, markets, 
prices, and wages, were all public matters. Even a man's 
amusements, private conduct, and religious beliefs, were not 
free from municipal interference. In short, private property 
in everything was allowed, and contract was supposed to 
regulate the relations of man to man, but both private prop- 
erty and contract were to be exercised only within the limits 
supposed to be set by the social welfare.^ Perhaps the spirit of 
these regulations and the extent to which they went may be 
fairly well suggested by the following extracts from the Non- 
Importation Agreement of 1774, signed by fifty delegates 
from all the colonies but Georgia, and afterward ratified by 
the Colonial Legislatures : "We will use our utmost endeav- 
ors to improve the breed of sheep, and to increase their num- 
ber to the greatest extent ; and to that end we will kill them 
as sparingly as may be, especially those of the most profitable 
kind; nor will we export any to the West Indies or else- 

^Weeden, index under "Law§," 



132 OUTLINES OF INDUSTRIAL HISTORY 

where; and those of us who are or may become overstocked 
with, or can conveniently spare, any sheep, will dispose of 
them to our neighbors, especially to the poorer sort, upon 
moderate terms. 

"Eighth. That we will, in our several stations, encourage 
frugality, economy, and industry; and promote agriculture, 
arts, and the manufactures of this country, especially that 
of wool; and will discountenance and discourage every 
species of extravagance and dissipation, especially all horse- 
racing, and all kinds of gaming, cock-fighting, exhibitions 
of plays, shows, and other expensive diversions and enter- 
tainments ; and on the death of any relation or friend, none 
of us, or any of our families, will go into any further 
mourning dress than a black crape or ribbon on the arm or 
hat for gentlemen, and a black ribbon and neck lace for 
ladies, and we will discountenance the giving of gloves and 
scarfs at funerals. 

"Ninth. That such as are venders of goods or merchandise 
will not take advantage of the scarcity of goods that may be 
occasioned by this association, but will sell the same at the 
rates we have been respectively accustomed to do, for twelve 
months last past. And if any vender of goods or merchandises 
shall sell any such goods on higher terms, or shall in any 
manner, or by any device whatsoever, violate or depart from 
this Agreement, no person ought, nor will any of us, deal with 
any such person, or his or her factor or agent, at any time 
thereafter for any commodity whatever." The Agreement 
then went on to provide for the choice of a "Committee in 
every County, City, and Town," whose duty it was to enforce 
the regulations so far as possible. The names of all those who 
broke it were to be published and "universally contemned as 
the enemies of American liberty." * 

suffirestive ^- ^^^ what rcspccts was the industry of America, 

Questions, during the Domestic Period, like the industry 
of England? Give reasons. 

'Hinsdale, p. 447. 



THE DOMESTIC PERIOD IN AMERICA 133 

2. In what respects was it different? Why? 

3. Show how English laws respecting American manufac- 
ture and trade helped to bring on the war for independence. 

4. Show how the framing and adoption of our Constitution 
were due partly to the fact that the colonists found great 
difficulty in carrying on their trade under the Articles of 
Confederation. 

5. Give any account you may have seen of the English 
manor as reproduced in America. 

6. Describe any colonial attempts to own land in common 
about which you have read. 

7. Why were they given up? 

8. Eeread the questions at the beginning of Chapter I, 
Part II. 

9. Search all your school histories of the United States for 
answers to some of the above questions ; also for what they 
say about home life, products, tools, methods, routes of 
travel, amusements, etc., and of men and women of colonial 
times in America. 

10. Show that the luxuries of one period are often the 
necessities of another. 



134 OUTLINES OF INDUSTRIAL HISTORY 



Chapter IV 

the period of the factory system of industry in" 
england and the united states 

, . ^ . 1. What accounts of the lives of great inventors 

Introductory o 

Questions, j^^vc jou read? Show whether their inventions 
were wholly new or merely improvements in some machine or 
process that had not yet been successful.^ 

2. Describe any case that you know where machines have, 
on a large scale, taken the place of men and women. What 
work, if any, are those men and women now doing?* 

3. Has the product become any cheaper to the consumers? 
Why? 

4. Give cases of persons who are mere machine tenders. 
What is the effect of their occupation upon them? Why? 

5. What advantages are there to put with the disadvan- 
tages of minute division of labor? 

6. Name some occupations in which machinery plays a very 
small part. Give reasons for the fact. 

7. Are many persons employed in such occupations? Why? 

8. Is the number in such occupations increasing or decreas- 
ing in comparison with total population? ' 

9. Give examples of liberties, conditions, limitations, and 
prohibitions, respecting private business enterprises which have 
been made by society as represented in its lawmaking bodies.* 

'Consult encyclopedias; also Parton, Captains of Industry — 
1889-1891, Houghton, Mifflin & Co., Boston; Smiles, Industrial Biog- 
raphy; Iromvorkers and Toolmakers — 1873, Harper Brothers, New 
York; and Smiles, Men of Invention and Industry — 1885, Harper 
Brothers, New York. 

^Davis, Does Machinery Displace Labor?— ' "The Forum," July, 
1898; Potter, Man and the Machine — "North American Review," 
vol. 65, p. 385; Wright, Do Labor-Saving Machines Deprive Men 
of Labor? — "The Chautauquan, " vol. 25. 

^Harris, Is There Work Enough for All? 

*Stimson, Handbook to the Labor Law of the United States— 189Q, 
Charles Scribner's Sons, New York. 



THE FACTORY PERIOD OF INDUSTRY 135 

10. Give examples of private business enterprises that are 
carried on in spite of the wishes of society as expressed in 
public opinion and in laws. Give reasons. 

11. Describe the largest business enterprise of which you 
have direct personal knowledge. 

a. How much land does it use? 

h. How much capital does it use? 

c. How many men and women are employed in it? 

d. What kind of a man is at the head of it? 

e. Why has the business become so large? 
/. What laws are in its favor? 

g. Why were they made? 
h. Who made them? 

12. Name some national public questions of recent years 
which directly affect private business enterprises. 

13. Name some state public questions of a similar sort. 

14. Name some local — town, city, or county — public ques- 
tions of a like kind. 

15. How are such questions settled in the United States? 

16. Are they always settled right? Why? 

17. How does the ratio of wage-workers to the total popula- 
tion now compare with the ratio of wage-workers to the total 
population one hundred years ago? Why? 

18. Are the present methods of producing, sharing, and 
consuming utilities likely to change? Why? 

19. Can you see signs of change now? If so, what signs? 

20. Are such changes usually rapid? Why? 

I. SUBSTITUTION OF MACHINES FOR TOOLS AND THE UTILIZATION OF 
STEAM AS A MOTIVE J^O WEE * 

Karl Marx^ has analyzed the differences 

Distinction Bo- •' 

tween a Tool between a tool and a machine, and has shown 

and a Machine. ,..„ -, . . .^ 

the profound significance to workmgmen of the 
modern substitution of one for the other. A needle directed 

>Marx, Capital, ch. xv — 1886, The Humboldt Publishing Co., 
New York. 
*The development of modern machinery and means of transpor- 



136 OUTLINES OF INDUSTRIAL HISTORY 

by tlie hand of a sewing woman is a mere tool. When it 
moves up and down in the grasp of a mechanism which is 
itself subject to some motive power, human or otherwise, the 
needle has become part of a machine. In the second case, the 
needle is not directly subject to the operator but to the 
mechanism which determines the direction and the limits of 
its motion. It is still indirectly subject to the operator, who 
can say whether it shall move rapidly or slowly or not at all. 
The fundamental difference between a mere tool and a 
machine is that in the machine the tool has passed out of the 
direct control of the handicraftsman. How far removed the 
tools of the machine are from direct human control depends 
upon the complexity of the machine. In a great variety of 
modern machine industries, many of the workers have become 
machine tenders, almost as automatic as the mechanically 
directed tools themselves. 

Besides tools, a machine also has a transmitting mechanism 
and a motor mechanism. On the basis of this analysis 
machines have long been used by civilized men. The simplest 
windmill for grinding grain has arms for catching the force 
of the wind, a shaft for transmitting this force, and a rotating 
stone to crush the gi'ain. 

The Develop- Modcm machiucs surpass early machines in the 

°^ Mlchmeryf** numbcr, variety, speed, and precision of their 

Tools. tools. The spinning jenny and mule which 

wrought a revolution in cotton manufacture held a large num- 



tation is of so much significance in the development of the indus- 
tries of the Factory Period that both the transforming and the 
transporting groups of occupations are here discussed before the 
extractive group. It will be observed, however, that in this 
long chapter, with its numerous sub-headings, the same method 
of grouping under the words "Extractors," "Transformers," 
"Transporters." etc., made familiar to us in Part I, and used thus 
far in Part II, is practically continued. The apparent complexity 
of topics will be somewhat simplified if this grouping is kept 
clearly in mind. 



THE FACTORY PERIOD OF INDUSTRY 137 

ber of spindles instead of the one of a hand spinning wheel. 
Hammers vary in weight from the hammers of pile drivers 
and trip hammers to those used by a dentist in filling teeth. 
A mowing machine and harvester have a score or so of station- 
ary shear blades over which the same number of active blades 
move back and forth with great rapidity. The human hand 
can stamp the few letters of a man's name or the name of a 
post office upon envelopes at the rate of several hundred in an 
hour, by using a rubber stamp. The modern printing press 
can stamp the thousands of letters of an eight-page newspaper 
upon 72,000 sheets in an hour.^ 

The reader needs only to appeal to his own 

The Develop- . ^ _ •' , . , 

ment of Modern experience and reading to accumulate evidence 

Alachinery: The » , , , , , . . 

Transmitting of the development of the transmitting mechan- 

Mechanigna. . , ,-^ ,, ,^ ,° _ 

ism of modern machinery. Many have seen the 
shafts, wheels, bands, and confusing variety of motion of some 
factory. All know of the building up of manufacturing 
towns like Lowell and Manchester by the transmission of the 
water power of a single river. Most have ridden upon cable 
or electric cars driven by the power transmitted for miles by 
cable or by electric wire. The press has exploited the fact 
of the utilization of the water power of Niagara to furnish 
heat, light, and motion, for the city of Buffalo. The storage 
battery is also an example of the transmission of power. 

The Develop- Howcver Completely the future development of 
Machiiie^°^The olcctricity as a motive power may enable man to 

Motive Power, (jjgcaj.^ the relatively wasteful steam engine, the 
record of steam has already been a sufficiently brilliant one. 
Animal power was weak, the wind was inconstant, and water 
power existed only in the vicinity of rapid streams. When steam 
was harnessed, all three of these limitations to the development 
of motive power were ended. The power of steam was prac- 
tically unlimited, it could be maintained continuously at will, 
and it could be generated at any place upon land or sea. Man 

^Wright, Industrial Evolution of the United States, p. 333. 



138 OUTLINES OF INDUSTRIAL HISTORY 

had found a motive power which could drive his most complex 
transmitting mechanism weighted with an infinite variety and. 
number of tools. The titanic power of steam was at the 
service of any man, at any time, at any place, for any 
purpose. 

//. DEVELOPMENT OF MANUFACTURES ACCOMPANYING THE GREAT 
INVENTIONS 

"The Great In- 1^ is not the purposo of these pages to give in 
''*'wo?kof''^ any detail the story of "the great inventions;" 

Many Men. -j. jg ^^ ^ general way known to most people. 
The fact that seems especially worthy of emphasis, before we 
pass to a consideration of the effect of these inventions upon 
all kinds of productive processes, is that even these inventions 
were the work of many men. Neither the engine nor any 
spinning or weaving machine was perfected and adopted all 
at once. The first use of a steam engine in cotton mills was 
in 1785, hut it was not until forty-five years afterward, in 
1830, when the Liverpool and Manchester Eailway was 
opened, that steam locomotion upon land became important. 
"No one of the inventions which were the greatest in their 
effect, the jenny, the water-frame, the mule, the power loom, 
was in the main attributable to the effort or ability of a single 
man ; each represented in its successful shape the addition of 
many successive increments of discovery; in most cases the 
successful invention was the slightly superior survivor of many 
similar attempts. 'The present spinning machinery which 
we now use is supposed to be a compound of about eight hun- 
dred inventions. The present carding machinery is a com- 
pound of about sixty patents.' " ^ 

One invention could not well be utilized until another was 
perfected. At one time weaving was ahead of spinning, and 
there was a gi'eat demand for yarn. Then spinning was so 
improved that the opposite was true. Then dyeing, bleach- 
ing, and finishing lagged behind. The attention of all those 

'Hobson, pp. 57-60. 



THE FACTORY PERIOD OF INDUSTRY 



139 



interested in the completed cloth was concentrated upon one 
partial process after another until invention had covered the 
whole group of processes and all were harmonized and made to 
supplement each other. 

The following table of statistics^ will show the 
Manufacture slow proffi'ess of invention in cotton machinery, 

of Textiles. -, , ,, • • +t 

and also the enormous increase m cotton pro- 
duction after the inventions became harmonized. This 
increase is well indicated by the imports of cotton, for Eng- 
land produced no cotton at home : 



Dates. 



1730 
1741 

1764 



1771 

to 

1775 



1781 
1785 

1792 
1813 
1830 

1833 
1841 



Cotton Im- 
ported, lbs. 


Dates. 


1,545,472 


1730 




1738 


1,645,031 


1748 


3,870,392 


1764 




1764 




1768 


4,764,589 


1771 




1775 




1779 


5,198,775 




18,400,384 


1785 


34,907,497 


1793 


51,000,000 


1813 


261,200,000 


1830 


287,000,000 


1832 


489,900,000 


1841 



Inventions, etc. 



Wyatt's roller-spinning (patented 1738). 

Kay's fly-shuttle. 

Paul's carding-macliine (useless until im- 
proved by Lees, Arkwright, Wood, 
1772-74). 

Hargreave's spinning - jenny (patented 
1770). For weft only. 

Calico-printing introduced into Lanca- 
shire. 

Arkwright perfects Wyatt's spinning- 
frame (patented 1769), liberating cotton 
from dependence upon linen warp. 

Arkwright's mill built at Cromford. 

Arkwright takes patents for carding, 

drawing, roving, spinning. 
Crompton's mule completed (combining 

jenny and water-frame, producing finer 

and more even yarn). 

Cartwright's power -loom. Watt and 
Boulton's first engine for cotton-mills. 

Whitney's saw-gin. 

Horrock's dressing-machine. 

The "Throstle" (almost exclusively used 
in England for spinning warp) . 

Roberts' self-acting mule perfected. 

Bullough's improved power-loom. Ring 
spinning (largely used in U. S. A., 
recently introduced into Lancashire). 



^Hobson, pp. 57-60. 



140 OUTLINES OF INDUSTRIAL HISTORY 

The number of pounds of cotton worked up in 1887-1888 was 
1,630,000,000, nearly four times as much as in 1841.^ 

[Note, — A curve for these figures may easily be plotted upon 
ruled note-paper, and will aid the mind to realize the 
enormous expansion in cotton manufacture.] 

"From this schedule it is evident that the history of this 
trade may be divided with tolerable accuracy into four 
periods : 

"1. The preparatory period of experimental inventions of 
Wyatt, Paul, etc., to the year 1770. 

"3. 1770 to 1792 (circa), the age of the great mechanical 
inventions. 

"3. 1792 to 1830, the application of steam power to manu- 
facture and improvements of the great inventions. 

"4. 1830 onward, the effect of steam locomotion upon the 
industry (1830, the opening of the Liverpool and Manchester 
railway) . " ^ 

The growth of this industry gives some indication of the 
importance to textile industries in general of the new motor 
power when coupled with complex and efficient machinery. 
A study of the table just given shows how slightly the amount 
of cotton manufacture was increased, even by the great inven- 
tions, until the new motive power of steam was applied in the 
last years of the eighteenth century. The introduction of 
steam engines was not general until after 1813, but after that 
the cotton importation shot up over five hundred per cent, 
in about fifteen years. The effect of the application of steam 
power to transportation after 1830 helped to produce another 
phenomenal increase. The statistics of increase in importa- 
tations of wool show nearly the same irregularities of expan- 
sion, although woolen importations are not a correct index 
to the expansion of woolen manufacture, owing to the fact 
that England also produced wool. 

iHobson, p. 80. 
'The same, p. 60. 



THE FACTORY PERIOD OF INDUSTRY 141 

The relation of the new motive power to the 

Increase In the . . ^ ,, . 

Manufacture Kon industry presents a striking contrast to that 
which it sustains to the textile manufactures. 
Hobson points out that, while in the textile industries, espe- 
cially cotton, invention of machinery preceded the utilization 
of steam as a motive power and was merely quickened and 
made effective by it, in the iron industry comparatively little 
improvement in processes and machinery took place until it 
was demanded by the existence of the new motive power. In 
1788, the total production of iron in England is reported to 
have been only 61,300 tons; in 1806, 258,206 tons; in 1839, 
1,377,790 tons; in 1895, 7,703,459 tons.^ 

"Iron has become a foundation upon which every machine 
industry alike is built. The metal manufactures, so small in 
the eighteenth century, attained an unprecedented growth and 
a paramount importance in the nineteenth. The application 
of machinery to the metal industries has led to an output of 
inventive genius not less remarkable in this century than the 
textile inventions of the eighteenth century. ' ' ^ 

The names and deeds of Brindley, Smeaton, Maudsley, 
Naamyth, Bessemer, Siemens, Martin, and others, must suffice 
to suggest the details of these inventions. 

Not all transforming industries have suffered the 

Man^a'c*turi ^^^^ ^^ *^® hand worker to be taken from his 

M^s^GcMrluy fii^g^rs and put iuto the grasp of an automatic 

u»*Machtoery^ machine. The extent to which this can be done 

depends very much upon the demands of men 

and women as consumers. 

Some important facts as to the industries which have 
already been taken possession of by machinery can be gath- 
ered by a class of students or by an individual. As a rule 
those industries will be found to be carried on by machinery 
which are characterized as follows : 

'Hobson, pp. 64, 65. Compare The Statesman's Year-Book, 1897. 

''The same, p. 66. 

*Tlie same, pp. 68-71 ; also ch. xiv. 



142 OUTLINES OF INDUSTRIAL HISTORY 

1. By a large product. 

2. By a product of uniform quality and pattern. 

3. By a product whose valuable properties are relatively 
permanent. 

The most universal wants of mankind, for food, clothing, 
and shelter, furnish a primary demand for such articles. All 
the milling processes for grains ; canning and packing proc- 
esses for fruits, vegetables, and meats; the manifold processes 
of preparing the materials for clothing, including clothing for 
the head and feet; and the preparation of all common 
varieties of building materials and house furnishings, have 
been given over to machines. 

On the other hand, goods that are demanded in small 
quantities, and goods that must suit the individual taste of 
esthetic consumers, are still largely confined to the personal 
skill of hand workers. 

The machinery that makes commodities; together with 
the machinery of transportation, and the tools of hand 
workers and servants, both men of science and domestic serv- 
ants; in short, tools and machinery of all kinds, form a 
secondary class of commodities which can easily be made by 
machinery. Such commodities, as a rule, are wanted in large 
quantities, of uniform quality and pattern ; and their valuable 
properties are enduring. Machinery for making machines has 
therefore marvelously increased during the last half of this 
century. 

"A general survey of the growth of new industrial 
methods in the textile and iron industries marks out 
three periods of abnormal activity in the evolution of 
modern industry. The first is 1780 to 1795, when the 
fruits of early inventions are ripened by the effective appli- 
cation of steam to the machine industries. The second 
is 1830 to 1845, when industry, reviving after the Euro- 
pean strife, utilized more widely the new inventions, and 
expanded under the new stimulus of steam locomotion. 
The third is 1856 to 1866 (circa), when the construo- 



THE FACTORY PERIOD OF INDUSTRY 143 

tion of machinery by machinery became the settled rule 
of industry. " ^ 
The Effect of We havo already called attention to the fact 
chSfe^^oduc- that the Domestic System of industry had 

i.o*iaiiz\ng rcsultcd in a certain amount of concentration 
Manufactures, ^j special Varieties of woolen manufacture in 
certain districts of England (see p. 91). The same tendency 
was manifest in the cotton, silk, and cutlery manufactures. 
Sometimes factories of fifty looms, and single employers having 
from one hundred to one hundred and fifty men, were found 
before the time of the great inventions.^ 

This tendency was immediately strengthened and at length 
made economically certain by the introduction of steam- 
driven machinery. The new machinery was expensive, and 
therefore could not be made to pay unless a large product was 
turned out by its aid. The distances over which the motive 
power of steam could be economically transmitted were not 
great, and, therefore, large factories crowded with machinery 
and workers became the rule. All the preliminary and sup- 
plementary processes connected with the manufacture of a 
great staple commodity like cotton, or wool, or iron, grew up 
in the immediate vicinity of the main process. A fuel supply 
was also another determining factor in placing the new manu- 
factures. In response to the economic compulsion of these 
new conditions, the manufacturing industries of England 
were rapidly withdrawn from the rural communities and from 
the households and concentrated in the coal region of the 
north and west of England and in southern Wales. 

"It is also curious to notice that each coal-field has its own 
particular manufacture closely associated with it. Thus the 
Yorkshire coal-field contains most of the towns where the 
woolen industry prevails, while its southern extension, which 
descends into Nottinghamshire, includes the cutlery and 
hardware district of Sheffield and the lace and hosiery of 

^Hobson, p. 67. 
^Gibbins, pp. 335, 336, 



144 OUTLINES OF INDUSTRIAL HISTORY 

Nottingham. The Lancashire coal-field is almost entirely 
surrounded by towns engaged in the cotton trade; the 
Staffordshire fields are connected chiefly with pottery, and, on 
their southern limit, with hardware and machinery; the 
South Wales coal district is noted for its smelting and iron 
works. "^ These concentrations of manufacture built up fac- 
tory towns black with smoke and humming with machinery. 
Population also shifted so much that, whereas in 1750 the 
greatest density of population in England was in the south- 
central and southwestern counties, it is now in the north- 
central and northwestern counties. 

Introduction of During and after the War for Independence, 
ch^e?y hito the Americans were straining every nerve to estab- 
united states, j-g-j^ manufactures of all sorts so as to be eco- 
nomically, as well as politically, independent of England. 
The second act passed by Congress under the Constitution 
was one which laid a duty on imported goods "for the sup- 
port of the Government, for the discharge of the debts of the 
United States, and for the encouragement and the protection 
of manufactures." 

But the mechanical inventions which were so revolutioniz- 
ing manufactures in England were guarded by the most 
stringent legislation and the most vigilant administration. 
All exportation of the machines themselves, of models and 
plans of the same, and all emigration of men who knew how 
to construct and use them, were strictly forbidden. "So the 
Americans were compelled either to smuggle or to invent 
their machinery, and it is simply a matter of history that both 
methods were practiced until most of the secrets of the manu- 
facture of cotton goods were made available in this country. " * 

The stories told of artisans who aided in the establishment 
of modern machine industry in the United States are many 
and interesting, but we must confine ourselves to two. 

'GibbinS; pp. 350, 352, 454; compare Hobson, ch. iv. 
*Wright, Industrial Evolution of the United States, pp. 133 and 
following. 



THE FACTORY PERIOD OF INDUSTRY 145 

It is related that Samuel Slater brought to America an 
accurate remembrance of the details of certain cotton ma- 
chinery, and made the first complete machines used in this 
country, in Pawtucket, Rhode Island, in 1790. He was led 
to this effort by seeing a notice in an American newspaper 
describing the efforts that were being made to establish 
such machinery, and mentioning the bounties that were offered 
to the man who should succeed. 

But, even with the introduction of cotton-spinning machin- 
ery from England, and the invention in the United States of 
the cotton gin, without which the development of cotton 
manufacture must have been very slow, the United States 
still lacked the power loom. To Mr. Francis C. Lowell 
belongs much of the credit of introducing this. After a visit to 
England during which he learned as much as possible, he built 
a complete factory at Waltham, Massachusetts, in 1814. For 
the loom that was there set up, Mr. Lowell had neither plans 
nor models. Spinning was also carried on in the same factory, 

"This factory erected at Waltham was the first in the world, 
so far as any record shows, in which all the processes involved 
in the manufacture of goods, from the raw material to the 
finished product, were carried on in one establishment by 
successive steps, mathematically considered, under one har- 
monious system, , , . Few changes have been made in the 
arrangement organized at the Waltham factory. So, while 
England furnished the foundation of the industrial structure 
known as the factory system of manufacture, America fur- 
nished the stone which completed the arch." ^ 

The importation and invention of modern machinery for a 
great variety of other manufactures has also gone on through- 
out the century. We must, therefore, picture to ourselves a 
later but similar transition in the United States from the Home 
and Domestic Systems of manufacture to the Factory System, 
which has already been mentioned as having taken place in 
England. 

^Wright, Industrial Evolution of the United States, p. 131. 



146 OUTLINES OF INDUSTRIAL HISTORY 

Increase of The estimated annual value of our manufac- 
Manufac^ures. |.yj,gg ^^ 1790 has already been given as $20,- 
Distribution. ooo,000, most of wliich went on in the homes of 
citizens. The total value of manufactured products for 1890, 
based on the reports of the Eleventh Census, is $9,372,437,283. 
This estimate includes the value of all raw materials in each 
process of manufacture. Furthermore, as the finished prod- 
uct of one transforming process often forms the raw material 
of a second, and the finished product of a second the raw 
material for a third, and so on, it will be seen at once that 
the total value of manufactures given above often duplicates 
and reduplicates the value of the original raw materials. This 
aggregate value of manufactures, therefore, should be lessened 
by these raw material values before the value added by mere 
transforming processes will appear. This can not be accurately 
done. The figures are, therefore, used as given, with this 
caution as to their meaning. 

All of this manufacture was carried on outside of the 
homes of workers, in 355,415 establishments employing 
4,712,622 persons. There is no estimate in 1890 of the value 
of manufacture which still goes on in the homes of the work- 
ers. As the population in 1790 was 3,929,214 persons, and 
in 1890 was 62,622,250, the population in 1890 was not six- 
teen times as numerous as it was a century earlier, while the 
value of manufactures in 1890 was more than 4,686 times 
greater than in 1790. 

Massachusetts alone produced 25.62 per cent of the total 
textile manufacture of the United States in 1890; the New 
England States together, 50.64 per cent; and the New Eng- 
land and Middle States together, 89.37 per cent. An indica- 
tion of the growing importance of the Southern States as a 
new center of cotton manufacture is found in the fact that, 
while from 1880 to 1890 the value of the textile manufactures 
of New England increased only 30.61 per cent, the value of 
the same product of the Southoin States increased 143.99 per 
cent. 



THE FACTORY PERIOD OF INDUSTRY 147 

The iron and steel industries are chiefly concentrated in 
Pennsylvania, Ohio, Alabama, Illinois, and New York. 
Taking manufactures as a whole, the first five states in order, 
according to the value of their manufactures in 1890, were 
New York, Pennsylvania, Illinois, Massachusetts, and Ohio. 
These five had more than half the total number of manufac- 
turing establishments and produced more than one-half of 
the total product of the United States in 1890. At this date 
the geographical center of the manufacturing industries of 
the country as a whole was within ten miles of Canton, Ohio. 

III. DEVELOPMENT OF TRANSPOBTATION FACILITIES 

English Trans- The most important English canals included 
*'itie**Pr° ^ous' one from Worsley to Manchester, seven miles 
to 1830. long; one from the river Trent to the Mersey, 
ninety-six miles long; also other canals connecting Hull with 
Liverpool, Liverpool with Bristol, and London with Oxford 
and other towns in the Midlands.^ The improvement of turn- 
pikes also went on, and, under the skilful direction of men 
like Telford and Macadam reached a high degree of perfection 
early in the nineteenth century. The transportation of pas- 
sengers by coach became general, and as comfortable and 
rapid as the nature of this means of transportation permitted. 
A comparatively small number of persons ever traveled for 
pleasure. The canals continued to be the principal thorough- 
fares for internal transportation of heavy goods, especially 
coal. 

The Growth of "The first line which carried passengers and 
way^and^anai upou which locomotivc stcam engines were used 
Transportation, ^^g the Stocktou and Darlingtou Kail way 
(opened in 1825), while the first to strongly attract public 
attention and afford some real inkling of future possibilities 
was the Liverpool and Manchester line, opened in 1830."^ 
By 1840 there were 800 miles of railway constructed in Great 

'Gibbins, pp. 355, 356. 
^Taylor, p. 358. 



148 



OUTLINES OF INDUSTRIAL HISTORY 



Britain. The following table shows the number of miles in 
operation at the end of each decade thereafter : 



Year. 


Miles. 


Year. 


Miles. 


Year. 


Miles, 


1850 
1860 


6,621 
10,433 


1870 
1880 


15,537 
17,933 


1890 
1895 


20,073 

21,174 



Of this mileage in 1895, 14,651 miles were in England and 
Wales, 3,350 miles in Scotland, and 3,173 miles in Ireland."^ 
In 1888, there was also a total of 3,813 miles of canals in 
use in Great Britain. In 1894, this canal system was made 
vastly more effective by the completion of the Manchester 
Shij) Canal, 36 feet deep, 120 feet in bottom width, and 35| 
miles long. This canal brings the whole internal system of 
canals in the neighborhood of Manchester into direct connec- 
tion with sea-going vessels. 

Transportation Late in the eighteenth century, and during 
s^tesVrevious the first quarter of the nineteenth, the prac- 
to 1830. ^j^g ^1 building turnpike roads, constructed 
and maintained by tolls, became frequent in the United 
States. A national effort was also made to connect the states 
west of the Alleghany Mountains with the Atlantic States by 
a gi'eat government road, called the Cumberland Road. In 
1806, Congress made its fh-st appropriation for this road; and, 
during the next thuty years, in spite of the opposition of the 
strict-constructionist members of Congress, who did not 
believe Congress had power to support internal improvements, 
the Cumberland Road was extended from Washington 
through Cumberland and Wheeling, to the Mississippi River, 
After 1790, many canals were projected and a less number 
constructed. New York, Pennsylvania, Ohio, Indiana, Illi- 
nois, and Virginia were the most active in this construction. 
The Ei'ie Canal, opened in 1825, and connecting the Hudson 
River with Lake Erie, has proved the most important of 

^The Statesman's Year-Boole, 1897, p. 90. 



THE FACTORY PERIOD OF INDUSTRY 



149 



these canals. Most of the canals actually constructed did not 
prove of great importance after railways were introduced. 

The Mississippi Eiver and its tributaries, and the Great 
Lakes, were utilized from the very beginning, as means of 
communication west of the AUeghanies. As soon as steam 
was applied to boats, the use of steamboats was gradually 
introduced upon the waters of this great region, and helped 
materially towards its settlement and the marketing of its 
produce. 
The Extension In spitc of all cfforts that could be put forth, 
of Railroads in jjQ^gygj.^ i\yQ general transportation of passengers 
United states. ^^^ goods was slow and expensive business in the 
United States previous to the era of railways. The beginning 
of this era was practically the same in the United States as in 
England. The first road of importance carrying passengers 
and goods, was a part of the Baltimore & Ohio Kailway, com- 
pleted in 1830. According to Poor's Manual of Railroads,^ 
the following table gives the number of miles of railway in 
operation at the end of each decade since that time : 



Year. 


Miles. 


Year. 


Miles. 


Year. 


Miles. 


1830 
1840 
1850 


33 

2,818 
9,021 


1860 
1870 
1880 


30,626 
52,923 
93,296 


1890 
1895 


166,698 
181,031 



Previous to 1850, practically all the railway west of the 
Atlantic States was about fifteen hundred miles. The table 
on the following page gives the distribution of railways at the 
end of each decade since 1850. ^ 

These two tables suggest the rapidity with which the suc- 
cessive waves of railroad construction swept over the country 
from east to west, and, since 1860, from the Pacific eastward 
as well. How the character of these roads changed from short 
local enterprises, radiating from the principal Atlantic cities. 



11896, p. XX. 

*Poor, Manual, 1896, p. xxi. 



150 



OUTLINES OF INDUSTRIAL HISTORY 



until they have become the great transcontinental lines with 
which we are familiar, is a fascinating study in itself. Most 
of this consolidation has taken place since 1850.^ 



Groups of 

States. 


1850. 


1860. 


1870. 


1880. 


1890. 


1895. 


New England... 
Middle 


2.507 
3,105 
1,276 
1,717 

416 


3,660 
6,353 
9,583 
5,463 

3,727 

1,162 

655 

23 

30,626 


4,494 

10,577 

14,701 

6,481 

5,106 
4,625 
5,004 
1,934 
52,922 


5,977 
15,181 
25,109 

8,474 

6,995 
14,085 
12,347 

5,128 
93,296 


6,831.90 
20,103.72 
36,926.68 
17,300.59 

13,342.66 

32,887.95 

27,294.36 

12,009.64 

166,697.50 


7,224.65 
21,704.73 


Cent'l Northern 
South Atlantic. 
Gulf and Miss- 
issippi Valley.. 
South Western.. 


39,393.52 
19,967.63 

14,442.13 
34,912.04 


North Western.. 




29,465.06 


Pacific 




13,911.16 


United States... 


9,021 


181,020.92 



[Note, — These statistics afford good material for diagrams.] 
These consolidations and other changes in railway con- 
struction and management have so reduced freight rates that 
"the average charge for carrying one ton of freight one mile 
is now [1894] a little less than one cent. In the decade 1850- 
1860, it was three cents or more."^ Before the era of rail- 
ways, the rate of transportation of heavy freight, like coal and 
farm produce, by land, was practically prohibitive for long 
distances. 

Previous to 1840, only a few oceanic passages 
Changes in the by stcamship had been made. During 1838, the 

FacUitiesfor "^ ttt -i i <-,• • . 

Transportation Great westem and the Sinus made trips, one 
from Liverpool and one from Cork. The follow- 
ing table gives the total registered tonnage of British vessels 
for each decade since 1840.^ From this table it will be seen 
that the substitution of steamships for sailing vessels did not go 
on very fast until after 1860. The substitution that has since 

iPoor, 1894, pp. 1356 and following; also 1896, pp. 85 and follow- 
ing. 

^Cooley, The United States of America, edited by N. S. Shaler, 
vol. II, p. 74—1894, D. Appleton & Co., New York. 

^The Statesman's Year-Book, 1897, p. xxiv. 



THE FACTORY PERIOD OF INDUSTRY 



151 



taken place will appear all the more significant when we 
remember that the carrying power of a steamship of the same 
tonnage as a sailing vessel is several times greater. Mr. Mul- 
hall ^ puts this superiority of a steamship over a sailing vessel 
at four hundred per cent. 



Years. 


Registered Tonnage. 


Years. 


Registered. Tonnage. 


Sailing. 


Steam. 


Sailing. 


Steam. 


1840 
1850 
1860 


2,680,334 
3,396,659 
4,204,360 


87,928 
168,474 
454,327 


1870 
1880 
1890 


4,577,855 
3,851,045 
2,936,021 


1,112,934 
2,723,468 
5,042,517 



Until about 1860, American shipping was, in the main, 
successful in gaining a fair share of the ocean carrying trade. 
The total tonnage of our coasting fleet at that date was a little 
over two and one-half million tons, and the tonnage of vessels 
carrying on foreign trade was a little less than two and one- 
half million tons. Since 1860, and since iron and steel 
clad vessels, driven by steam, have been constructed, the 
United States has lost most of the ocean carrying business. 
In 1896, the registered tonnage of American vessels was as 
follows. 

Tons. 

Sailing vessels (including canal boats and barges) 2, 396, 672 

Steam vessels 2,307,208 

Total 4,703,880 

Total tonnage registered in foreign trade 829, 833 

Total tonnage in coasting trade, on Great Lakes and 

western rivers 3,874,047 

These statistics, taken as a whole, and especially those for 
the British steam vessels, suggest a statement the truth of 
which few people realize. The present facilities for rapid 
oceanic transportation of persons and merchandise have prac- 
tically all been developed within the last thirty or forty years. 

'Mulhall, Industries and Wealth of Nations, p. 43—1896, Long- 
mans, Green, & Co., New York. 



162 OUTLINES OF INDUSTRIAL HISTORY 

The memory of persons hardly past the prime of life covers 
the whole period of intercontinental steam transportation. 
The signifi- We havc already pictured the eighteenth century 

cance of Modern , , ,• • tti i j i. i • i 

Facilities for transportation m Jingland as taking place 
on'r.and'and'* mainly along the radii of circles having towns 
^*"" as their centers, with comparatively little traffic 

between one large town and another. This limitation upon 
land transportation has, until the nineteenth century, made it 
necessary for each local community having a radius of a few 
miles to produce for itself most of its staple goods. Almost 
all the industries necessary for the simple life of a people have, 
until recent years, been carried on within a comparatively 
short distance from the homes of consumers. Now almost 
any product, including fresh meat, can be consumed thou- 
sands of miles away from the place where it was produced. 
So far as transportation is concerned, the civilized world can 
now be supplied with products from those places where they can 
be produced most cheaply and of most satisfactory quality. 
As a consequence, the natural resources of the earth in soil, 
climate, mine, and forest can be utilized to-day as never 
before. For example, while it was once necessary for the men 
of New England, Pennsylvania, Kansas, Georgia, and Dakota 
to furnish their own clothing, fuel, beef and corn, building 
materials, and wheat, each from his own narrow territory, now 
cloth from New England looms, coal from the mines of Pennsyl- 
vania, beef and corn from the Kansas prau'ies, pine from the 
forests of Georgia, and wheat from the Eed Elver valley of 
Dakota, are commonly used not only in all these states but all 
over the country. The old economic isolation of one region 
from another has given place to an era when East, North, 
South, and West are bound together by an intricate network 
of steel rails over which, in every direction, are constantly 
hurled ponderous freight-train projectiles loaded with the best 
products of each section to be distributed to all. Nor is this 
interchange of wealth and services confined to the parts of a 
single country. The newspapers are full of projects for the 



THE FACTORY PERIOD OF INDUSTRY 153 

combination of transcontinental lines of railway with trans- 
oceanic lines of steamships, so that the time required for one 
man's product to be laid at the doors of a consuming world 
may be yet further shortened, and side by side with this 
marvelous development in the means of transportation of 
goods and persons is also developing the still more wonderful 
facility of transmission of ideas; already by means of tele- 
phone, cable, modern telegi'aphy with wires, wireless teleg- 
raphy, the telautograph, etc. , the whole civilized world quivers 
with the transferrence of thought like the nervous system of 
the human body. 

In a Vt^ord, electric thought transmission and steam trans- 
portation on land and sea are fast creating a division of labor, 
on a world scale, among places, and have already made the 
nineteenth century differ more from the eighteenth than the 
eighteenth differed from that of the pyramid builders of Egypt. 

In this connection Mr. Mulhall makes an interesting compu- 
tation. He states that the number of foot-tons of power now 
used in transportation is much greater than the number used 
in production. His figures are as follows. ^ 





Years. 


Millions of Foot-Tons Used Daily. 




Production. 


Distribution. 


1840 

1895 


73,700 
174,120 


50,300 
266,840 







It is impossible that these figures should state the truth 
with minute accuracy, but there can be no doubt that they 
reveal a great truth. Hand in hand with this new facility to 
travel and to transport goods, goes the new facility for inter- 
change of thought, so that the "commercialism" of the time 
is necessarily connected with a larger, many-sided thought and 
soul life. Something of all this marvelous possibility of 
touching the life of man in all parts of the world — of actual 

^Mulhall, p. 20. 



154 OUTLINES OF INDUSTRIAL HISTORY 

connection, through the exchange of services and of wealth, 
with all mankind — must have been deeply felt by Tennyson 
when he wrote : 

"Better fifty years of Europe 
Than a cycle of Cathay." 

IV. DEVELOPMENT OF EXTRACTIVE INDUSTRIES 

In spite of all the enclosure that had taken place 

Enclosure of -^ iti 

the Common for the establishment of sheep-farms, and to 

Fields in Kng- „ „ , ., i i i n i i t 

land in the allow of Convertible husbandi'v, we have already 

Eighteenth and , , t • i - , ^ i V 

Nineteenth sccn that about onc-third of the common nelds 

Centuries. . ■■! i • i 

remained unenclosed until the eighteenth cen- 
tury. These fields were still cultivated very much as they had 
been in the time of King William I. (1066-1087). But, upon 
the land which had been enclosed, convertible husbandi'y was 
tending toward improvements of many kinds in agriculture. 
Chief among these was a more or less scientific rotation of crops, 
including roots and clover. Drainage was also making its 
way. Accordingly, in the eighteenth century, the idea of 
improvement in agriculture slowly gained ground, so that the 
task of enclosing the remainder of the common fields was 
resumed to make way for better tillage. 

Mr. Toynbee tells us ^ that, from 1710 to 1760, this movement 
was so slow that only 300,000 acres were enclosed, but that, 
from 1760 to 1843, nearly 7,000,000 acres were enclosed. 
These changes bore hard upon the small farmers, and greatly 
reduced the number of men, who, as freeholders, copy- 
holders, and small tenants, had hitherto remained in vital 
contact with the soil. "Enclosures brought an extension of 
arable cultivation, and the tillage of inferior soils, and in 
small farms of forty to one hundred acres, where the land was 
exhausted by repeated corn crops, the farm buildings of clay 
and mud walls, and three-fourths of the estate often saturated 
with water, consolidation into farms of 100 to 500 acres meant 
rotation of crops, leases of nineteen years, and good farm 

^pp. 88 and following. 



THE FACTORY PERIOD OF INDUSTRY 155 

buildings. The period was one of great agricultural advance; 
the breed of cattle was improved, rotation of crops was gener- 
ally introduced, the steam-plough was invented, and agri- 
cultural societies were instituted. ' ' ^ 
Decrease in Thcso cliangcs in agricultural methods, the 

Proportion of , . » - , , i 

Agricultural phenomenal rise of manufactures, the growing 

Classes in Eng- f „ , , , » n 

land. importance of the transporters, transferrers, and 
servants, together with the industrial development in the 
whole civilized world — both the purely economic development 
and this development as it was modified by the legislation of 
England and other countries — caused a decline in the agri- 
cultural classes when compared with the total population. 

We have already given an estimate for 1688, which showed 
over eighty-nine per cent as engaged in agriculture. Re- 
membering the comments already made upon these figures, 
and also bearing in mind that a greater amount of manufac- 
ture was then carried on in the homes of the farmers than at 
present, we may give still further estimates and census reports 
for comparison. 

Arthur Young's estimate for 1769 was as follows : ^ 

Agricultural classes 3,600,000 

Manufacturing classes 3,000,000 

Commerce 700,000 

Professional classes 200,000 

Paupers 600,000 

Military and official classes 500,000 

Total 8,600,000 

[Note. — Compare diagram of these statistics of occupations 
with those previously made.] 

This gives over forty-one per cent engaged in agriculture 
seven hundred years after the Domesday Survey. The decline 
in percentage of the total population engaged in agriculture 
continued during the first of the nineteenth century as follows : ^ 

'Toynbee, p. 89. 
2 Hobson, pp. 21, 22. 

^Toynbee, p. 88. Compare Gibbins, p. 446, and The Statesman's 
Year-Boole, 1897, pp. 19, 20. 



156 OUTLINES OF INDUSTRIAL HISTORY 

1811 35 percent. 

1821 33 percent. 

1831 28 percent. 

Later figures show periods, not only of relative, but of abso- 
lute, decline in the numbers of agricultural laborers in Great 
Britain. The census returns show that 70.4 per cent of the 
total population of England and Wales in 1891 lived in towns 
and cities of over 3,000 people. TJie same census gives only 
12.1 per cent of all males over ten years old in England and 
Wales as engaged in agriculture and fishing. 

These facts are of profound significance, as they suggest not 
only the modern tendency of population in civilized countries 
toward the towns and cities, but also something of the extent 
to which the workers of England have been withdrawn from 
direct production of a food supply. 

Generalizations The wholc period siucc the Conquest, from the 
EngU8h*A*gri- point of view of English agriculture, can be 
culture. divided into three sub-periods : ^ 

1. A period of universal open-field agriculture. 

2. A period when the open-field system had been partially 
supplanted by sheep pasturing and convertible husbandry in 
enclosed fields. 

3. A period when the open-field system has entirely disap- 
peared, and the enclosed fields are wholly devoted to pas- 
turage, convertible husbandry, and to the modern intensive 
agriculture, known as the rotation of crops. 

In the last period only has scientific farming been at all 
common, or even possible. The gradual passage from the 
first of these systems to the last has been accompanied by a 
decrease in the ratio between the agricultural and total 
populations. 

The natural fertility of much of the soil in the 

the United United States, combined with the ease with 

which men could acquire ownership of shares of 

the public land, has made the ratio of farmers to the total 

»Ashley, vol II, p. 262. 



THE FACTORY PERIOD OF INDUSTRY 157 

population very large in this country, and has tended to make 
the methods of tillage careless and "wasteful. "Our extensive 
agriculture has converted a portion of the natural fertility of 
our soils into other kinds of wealth that were less abundant. 
In the older sections of the country, intensive cultivation has 
long been practiced. After the great staple crops of corn and 
wheat have been raised for successive years with the smallest 
expenditure of capital and labor, the soil becomes perceptibly 
impoverished; and the production of grain moves steadily 
westward toward unoccupied territory. Then, on the older 
lands of the East begins a more careful, intensive cultivation 
of smaller crops, vegetables, fruits or grass for the support of 
the dairy. On the better portion of these lands, cereal crops 
are still raised by higher cultivation, while the poorer soils are 
often allowed to revert to forest. In the vicinity of towns and 
cities, market -gardening allows a still more intensive applica- 
tion of labor and capital." ^ 

In the very nature of the case, as population increases and 
new lands give out, intensive methods must gradually 
encroach upon the great grain fields and ranches of the 
country. Thus far, the great areas cultivated by our extensive 
agriculture have necessitated the use of more agricultural 
machinery than is used in any other land. Most of this has 
been invented and manufactured in the United States. When 
once perfected, small farmers also often reap the benefit of the 
use of such machinery by neighborhood ownership of drills, 
harvesters, etc. The total value of the farm product in 1889 
was $2,460,107,454. 

In comparison with England, the ratio of our agricultural 
population to the total is very large. Of the 22,735,661 men 
and women reported by the census of 1890 to be engaged in 
gainful occupations, 8,466,251, or over 37 per cent, were 
engaged in agriculture. 

Although this per cent is still large, yet the tendency of 
urban population to increase faster than rural is as evident in 

iBuUock, pp. 42,"43^ ~ ' 



168 OUTLINES OF INDUSTRIAL HISTORY 

the United States as in England. The 3.35 per cent living 
in towns of 8,000 people and over, in 1790, did not increase to 
10 per cent until after 1840. In 1890, the urban population 
in cities of the same size was 29.2 per cent of the total. 

The motive power of steam began to revolu- 

Eng'iand? tiouize coal and iron mining in England during 
the last of the eighteenth century. Steam 
power was used to clear the mines of water, to sink shafts, to 
raise coal and ore from the mines, and to furnish blasts of air 
for the furnaces. When the new motive power was applied to 
land transportation by means of locomotives, the revolution 
was complete. In 1895, the production of coal and iron in 
the United Kingdom was as follows : ^ 

Iron ore, 12,615,414 tons, which yielded 4,394,987 tons of 
metal. 

Coal, 189,661,362 tons. 

"The total number of persons employed in and about all 
mines in the United Kingdom, in 1895, was 733,657; of this 
number, 584,298 were employed underground." 

Because of the stress of the task of appropri- 
in the atiug a ncw continent, the miDing interests of the 

United states. ^^ .° ^ ^ ,., / ... 

united States, like the manufacturing interests, 
were developed comparatively late. With the exception of 
gold in the Carolinas and Georgia, of small quantities of 
various other minerals, and of comparatively small amounts of 
coal and iron, the mineral resources of the country were 
hardly touched in 1850. Since 1860, the development has 
been rapid. The census of 1890 gives a total of fifty-four 
mineral products, having a total value of $587,230,662, which 
were mined in 1889. In 1890, these mines required the labor 
of 387,246 persons, 208,549 of them being coal miners. 

Of course, the lumber business of Great Britain 

Fislierles . . , .„ , , ^-^ . , _, 

»nfi is insignificant. In the United States, however, 

Liumbering. 

the total products of the forests for 1889 were 
valued at $446,034,761. Over $400,000,000 of this value 

'^The Statesman's Year-Book, pp. 73, 72- 



THE FACTORY PERIOD OF INDUSTRY 159 

represents products which had gone through various trans- 
forming processes of mill, lathe, etc. The number of men in 
1890 directly occupied in chopping and getting out logs 
from the forests was 99,554. 

The products of the fisheries for 1889, including oysters, 
were valued at $42,277,514. In 1890, there were 60,150 
persons engaged in these industries. 

In Great Britain, the value of fish, including shellfish, 
landed in 1896, was 7,435,199 pounds sterling. In 1894, 
the British fisheries employed 121,978 men. 

V. TEANSF^SEING INDUSTRIES: CHANGES IN EXTENT AND METHODS OF 

TRADE 

The Growing It has already been pointed out that, previous to 
^enc«oTMen' the era of steam locomotion, nations themselves, 
and Nations. ^^^ ^^^^ local areas within nations, were, to 
a great degree, self-sufficing in respect to the great staple 
commodities which furnish men with food, clothing, and 
shelter. As occupations differentiated, more local trade took 
place, and as means for transportation, both of goods and of 
ideas, have become international, the humblest homes gather, 
from many latitudes and from m^any lands, the various prod- 
ucts which are daily consumed. 

The variety stores of country villages, where all sorts of 
commodities may be bought at any time, are a comparatively 
new economic institution in the world. Staple goods of an 
English community were exchanged in towns on market days, 
and goods not so exchanged were to be bought only at peri- 
odical fairs or in the largest towns, until toward the close of 
the eighteenth century. "Till the epoch of modern railways, 
in fact, fairs were a necessity, though now the rapidity of loco- 
motion, and the facility with which goods can be ordered and 
dispatched, have annihilated their utility and rendered their 
relics a nuisance." ^ 

^Gibbins, p. 141. 



160 OUTLINES OF INDUSTRIAL HISTORY 

"The trader did not exist in the villages. In most vil- 
lages, he hardly existed at the begiEning of the present [nine- 
teenth] century. In my native village, the first shop was 
opened, for general trade, about sixty years ago, as I have 
heard, and for many years afterward, the wants of the vil- 
lagers were supplied by packmen and pedlars, or, in the 
case of the more opulent, by carts, which came periodically 
from the nearest towns for orders."^ 

"In 1696, Massachusetts confined the marketing in Boston 
to Tuesdays, Thursdays, and Saturdays, at such places as a 
majority of the justices of the peace might define."^ Bristol 
allowed marketing only on Thursdays, in 1693. 

Faneuil Hall, erected in 1740, was the first daily and 
permanent market that Boston had. "New Hampshire 
appointed market and fair days in May and October, at 
Hampton Falls, in 1734."' 

VI. SERVANTS 

The number of services performed by the 

specialization j-ii i ^ j -u i.-j 

In this Group of medieval clergy has already been mentioned. 
Other illustrations of the lack of separation 
between different groups of occupations abound. Mr. Eogera 
says : "When the King dismisses his parliament, in the middle 
ages, he sends nobles to their sports, the commons to their har- 
vests, and makes no distinction between knights of the shire 
and burgesses. So, we are told, the long vacation in the courts 
and the universities was extended from July to October, in 
order that such persons as followed the pursuits of law and 
letters might have ample leisure for the all-important work of 
the harvest."* Thus statesmanship, law, and education were 
closely connected with agriculture. Education and the 

'Rogers, p. 147. 
=Weeden, vol. I, p. 406. . 
'The same, vol. II, pp. 534-536, 
^Rogers, p. 122. 



THE FACTORY PERIOD OF INDUSTRY 161 

church, and the church and state are not yet distinct in Eng- 
land. In America also, with some religious denominations, 
education and the church go hand in hand. In general, how- 
ever, it may truthfully be said, that the nineteenth century has 
seen more specialization of this whole group of occupations 
from other groups, and more specialization of class from class 
within the group than was ever known before. 

In education, the rise of the public school system of the 
United States, from the kindergarten to the university, is 
developing specialists all along the line. A similar develop- 
ment is going on in England. 

In municipal and national government, the civil service is 
coming to be composed of specialized and relatively permanent 
public servants. Democracy has made real progress in the 
nineteenth century. 

The whole field of the physical sciences has been divided up 
between scores of groups of special scientists. The social 
sciences are now in process of a similar survey and partition. 
Medicine is remarkably specialized. Skilled personal services 
of all kinds can be obtained as never before. Music, books, 
and pictures, are bringing the inspiration of the most gifted 
servants of the century within the reach of all, as never before 
in the history of the world. 

The ratio of those who produce services to those who pro- 
duce wealth has increased during this period, and the eco- 
nomic significance of such production is becoming more 
frankly recognized than formerly. If accurate statistics were 
available to show precisely how many persons, in comparison 
with the total population, have, in successive centuries, been 
spared from immediate material production to produce per- 
sonal, domestic, professional, educational, scientific, and artis- 
tic services, it would reveal much respecting the economic 
progress of America and England. The absolute number 
of servants of all sorts is now very large in England and the 
United States. In comparison with the early life of each 
country, the present abundance and variety of services are of 



162 OUTLINES OF INDUSTRIAL HISTORY 

untold value in making human life more varied, free, and 
altogether enjoyable.^ 

Domestic service is not yet adjusted to the ideals of modern 
life.^ Still, it should be pointed out, that the days of legal 
indentured servants and of slavery are past. Servants, like 
wage-earners in material production, are politically free. The 
problems of the economic freedom and social position of both 
are a part of the so-called labor question of to-day. To the 
correct solution of this question, the lives and activities, as 
well as the thoughts, of honest, earnest, and intelligent men 
and women, in all quarters, must be devoted. Young men 
and women who have not yet completed then- prescribed 
courses of education will find the problem large enough to 
absorb much of their best life effort. 

VII. PROBLEMS OF POVERTY AND PARASITISM 

Suggestive Accordiug to the census of 1890, there were, in 
statistics. ^^^^ yg^^.^ .^ ^^^ United States : 

Penitentiary convicts 45,233 

Prisoners in county jails 19,538 

Inmates of juvenile reformatories 14,846 

Almshouse paupers 73,045 

Total 152,662 

In addition to these classes, who are being supported at 
public expense for longer and shorter periods, there is the 
familiar tramp; and, in 1894, there were the "Commonweal 
Armies," led by Coxey, Eandall, Browne, Kelly, and others, 
which numbered in all about 10,000 men. In all periods of 
depression, there are many men out of work in all parts of 
the country, who often suffer great destitution, in spite of 
the generous aid of their friends who have employment, 
and the irregular aid of the benevolent and of public 
authorities. "During the depression of 1882 to 1885, it is 
estimated that about 1,000,000 men were idle; during the 

'Harris, Is There. Work Enough for All? 

^Addams, A Belated Industry — "The American Journal of Soci- 
ology," March, 1896, The University of Chicago Press, 



THE FACTORY PERIOD OF INDUSTRY 163 

recent depression, following the crisis of 1893, the trade union 
estimates put the number at about 4,500,000; more con- 
servatire estimates, at about 1,000,000. Returns made to 
Bradstreet's, the results of which were published December 
23, 1893, show that in 119 cities, 801,055 men, with about 
1,956,110 persons dependent upon them, were out of employ- 
ment." ^ 

In England and Wales, in 1895, the number of paupers, 
exclusive of vagrants and casual poor, in receipt of official 
relief, was 817,431 persons. The amount of relief given them 
was 9,866,605 pounds sterling.^ 

"In 1881, no less than one in ten of the total recorded 
deaths took place in workhouses, public hospitals, and lunatic 
asylums. In London, the proportion is much greater. In 
1888, out of 79,000 deaths in London, 10,170 took place in 
workhouses, 7,113 in public hospitals, and 380 in public 
asylums, making a total of 17,662, or more than one-fifth 
the whole number. Since comparatively few children die in 
these institutions, it seems probable that, in the richest city 
in the world, one in every four adults dies dependent upon 
public charity."^ 
Efforts to Deal The abovo bare statements of fact are enough 

Problem. to show that the problem of the poor and of the 
unemployed has grown enormously in the United States since 
colonial days, and they are enough to show, also, that, what- 
ever efforts have been put forth in Great Britain, during the 
reign of Elizabeth and since, the English problem still remains 
unsolved. Poverty notably increased during the latter part 
of the eighteenth century, various changes in the poor-laws 
were made, and the greatest abuses grew up. Chief of these 
was a system of allowances, in accordance with which assist- 

'Warner, American Charities, A Study in Philanthropy and 
Economics— ISM, T. Y. Crowell & Co., New York. 

'^The Statesman's Year-Boole, p. 41. 

^Hobson, Problevis of Poverty, p. 19 — 1891, Methuen &; Co., 
London. 



164 OUTLINES OF INDUSTRIAL HISTORY 

ance was given to families in proportion to the number of 
childi'eu. Low wages were often given by employers, pur- 
posely, in order that the deficiency might be made up by con- 
tributions from the poor-rates, which were collected from 
employers and non-employers alike. "The farmers, being 
the chief employers of labor, welcomed the system, for they 
either diminished wages to the minimum allowance of the 
Justices, with the knowledge that it would be made up to their 
laborers from the rates; or they dismissed their own men in 
favor of the paupers, who, in accordance with arrangements 
in vogue in many places, the parish compelled them to 
employ, or, at any rate, to support. And thus, while the 
honest laborer was driven out of work, or, at best, had to 
accept in the minimum wage a less sum than was paid to the 
rate-aided pauper, marriages were recklessly made, the pauper 
going, as it has been said, straight from the church to the 
overseer, and every encouragement was given, not only to 
incontinence, but to immorality of the most flagrant kind." ^ 
This system continued from 1795 to 1834, from which time 
until the present numerous reforms have been introduced. 
Not only was the system previous to 1834 bad in the par- 
ticulars suggested, but it was chaotic in administration. 
"The rates were administered by 2,000 justices, 15,000 sets of 
overseers, and 15,000 vestries, acting always independently of 
each other, and very commonly in opposition, quite uncon- 
trolled and ignorant of the very rudiments of political 
economy. ' ' '^ 

The reforms since 1834 have been directed especially toward 
the removal of abuses such as have been suggested, and toward 
an organization for administration that should combine greater 
local responsibility with greater national unity. This organi- 
zation consists of a local government board, the chairman of 
which is a cabinet officer, 648 poor-law unions, in England 

'Medley, pp. 370, 371 ; compare pp. 361-374. 

"Fowle, The Poor Law, pp. 73, 74, also pp. 89-98—1890, The 
Macmillan Co. , New York. 



THE FACTORY PERIOD OF INDUSTRY 165 

and Wales, each including one or more parishes, and each 
having an elective board of guardians, and overseers for each 
parish. 

In the United States, the unit of legislation, for the pur- 
pose of poor relief, is the State. "In each commonwealth, 
the fabric of the public charitable institutions rests upon the 
quicksands of the poor-law, which few study and probably 
none understand. It was said of the English poor-law, by the 
commission appointed to investigate its workings, that there 
was scarcely one statute connected with the administration of 
poor -relief which had produced the effect designed by the 
legislature, and that the majority of them had created new 
evils and aggravated those which they were intended to pre- 
vent. The same is substantially true in many of our own 
States, and especially in the older commonwealths, such as 
New York and Pennsylvania, where the legislatures have not 
been careful to repeal existing legislation when enacting new 
laws. The result is a tangle of statutes, which cannot be 
rationally interpreted, because they have no rational basis. 
The courts construe them from time to time, because they 
must, and not because they know how. The fact that, after 
years of giving outdoor relief in Brooklyn, the whole system 
was decided to be illegal, shows the unsubstantial nature of the 
foundation upon which our system of poor -relief sometimes 
rests." ^ 

Not only are charities chaotically administered under State 
laws, but the benevolent work of churches and various 
voluntary associations, having too little unity of action, and 
the indiscriminate giving of individuals, often add to the 
tangle. 

The chief signs of future improvement in this branch of 
social administration, as discerned by Mr. Warner, are as 
follows : ^ 

1. The burden of relief is so heavy that "we must become 

^Warner, p. 311. 
"The same, pp. 394-407. 



166 OUTLINES OF INDUSTRIAL HISTORY 

wiser or be crushed." About one hundred millions of dollars 
annually are needed for charity. 

2. Large numbers of the influential classes are recognizing 
the fact that they are more or less responsible for understand- 
ing all the social conditions and institutions which cause 
existing evils, and for doing all in their power to apply 
remedies. 

3. There is a greater tendency to use scientific methods in 
charitable work. 

4. New books are helping to clear up the general subject, 
and the most progressive colleges and universities are offering 
courses in "philanthropology. " 

5. The administration of charities is becoming a profession. 

6. Local and national conferences are regularly held 
"for the comparative study of charities, and the more 
extended application of whatever methods have been found 
best." 

When the words "dependent" and "parasite" are used, 
some persons think only of the worthy and unworthy poor, 
but others think also of another class. The charge of 
economic parasitism is often indiscriminately applied to 
those who collect rent and interest. "In that section of 
our nation which speaks of itself as 'society,' being, 
indeed, a society separated by economic parasitism from the 
common mass, we find that the characteristic activity is 
the provision of agreettble and exciting methods of passing 
time."^ This may be too sweeping, but, in view of the fact 
of its partial truth, in view of the fact of the boundless 
opportunities for social study, open to all, and in view of the 
appalling facts of human need, the mere reading of the above 
quotation may well suggest to each young man and young 
woman the question: To what extent am I, through my 
personal effort, as distinct from my property, producing 
utility in the form of services and wealth, in return for the 
utilities I consume? 

^Fabian Essays, p. 107—1894, Charles E. Brown & Co., Boston. 



THE FACTORY PERIOD OF INDUSTRY 167 

VIII. LANDLORDS 

After the Eevolution, the Atlantic States ceded 

rjandholding: 

in the United their territory west of the Alleffhany Mountains 

states Under ,_.^^ ^,° "^ .. . 

the to the United States, and thus was originated 

the public domain. By purchase, by conquest, 
and by treaty, the public lands have been added to, from the 
time of the Louisiana purchase until the purchase of Alaska. 
"By the Ordinance of 1787, absolute ownership of land was 
guaranteed. There was to be no more primogeniture nor 
entail on the public domain." ^ 

"The General Land Office, charged with the care and 
custody of the public lands, under the supervision of the Secre- 
tary of the Interior, is one of the most important and respon- 
sible public divisions in the administrative circles of the 
Government. The survey, sale, or other disposition of the 
nation's public lands, is within its control. ... Its jurisdic- 
tion reaches from Lake Erie to the Pacific Ocean, and from 
Canada to the Gulf of Mexico. Four-fifths of the lands of the 
entire area of the United States have been, or are now, under 
its supervision."^ By sale at prices from $1.25 to $2.50 per 
acre, by homestead and tree claims, and by bounties to soldiers 
and sailors, vast areas of this public land have come into the 
possession of resident owners. Eaihoads, other corporations, 
and schools and colleges have also secured enormous areas. 
Fraud and failure to fulfill contracts have been frequent both 
on the part of private persons and corporations. Exclusive of 
Indian, timber, and military reservations, about 600,000,000 
acres of public land remained in 1896. Most of this is too 
dry, too rugged, too swampy, or in some other way unfit at 
present, for agricultural purposes. Most of the lands of 
Alaska, also, yet remain under Government control. 

The extent to which private persons own land in the United 
States is partially suggested by the following statements of 
fact based on the census of 1890 : 

iSato, pp. 17, 18. 

^The same, p. 127. Compare Donaldson, pp. 1323, 1333. 



168 OUTLINES OF INDUSTRIAL HISTORY 

Families occupying encumbered farms of their own 886,957 

Families occupying unencumbered farms of their own... 2,255,789 

Total families occupying their own farms 3,142,746 

Families occupying hired farms 1,624,433 

Total families occupying farms 4,767,179 

The percentage of farm homes and other homes owned and 
rented in 1890 were as follows : ^ 

, — Percentages — n 
Owned. Rented, 

Homes in cities above 100,000 22.83 77.17 

Homes in cities from 8, 000 to 1 00, 000 35. 96 64. 04 

Homes outside such cities (but not farms) 43.78 56.22 

Farms 65.92 34.08 

Average 47.80 52.20 

So far as economic independence is secured by ownership of 
land, therefore, this ia least common in the largest cities and 
most common upon the farms. It should also be pointed out 
that the land ownership in cities here described does not give 
the owners much opportunity for productive effort at home, 
in comparison with the ownership of farms. The tendency of 
population toward the cities in the United States, therefore, 
means at least this — an increasing dependency of the popula- 
tion as a whole upon others than themselves for access to the 
land, both for the purpose of having a spot on which to dwell, 
and for opportunity to take part in production. The time 
has long since gone past, in the United States, as well as in 
England, when the majority of men enjoy private ownership 
of land even for a home. 

Facts have already been given to show that both 

liandholdiner . t , , 

in England the proportionate and absolute numbers of per- 

Durlng the r r . ^ -r. • • 

Period of the SOUS engaged m agriculture m Great Britain 

Factory System. ° ° ^ . . , . , 

have known periods of decline within the last 
century. It has also been stated that the small freeholders 
and tenants of various kinds were greatly reduced in number. 

> Spahr, p. 53. 



THE FACTORY PERIOD OF INDUSTRY 169 

This decrease seems to have been going on, with greater or less 
rapidity, ever since the enclosures which followed the Black 
Death began. Since 1688, and especially since the close of 
the eighteenth century and during the first of the nineteenth, 
the process went on even faster. During this period, rich mer- 
chants and manufacturers bought up the lands of small farm- 
ers, who were forced to sell because of enclosure, since they 
could not afford the outlay necessary to farm by the improved 
methods that were being adopted, and for other reasons that 
can not here be explained. The excessive poor-rates at the 
beginning of the nineteenth century, which, we have seen, 
bore more heavily upon the small farmer, who employed little 
labor, than upon the large farmer, who employed much, also 
taxed many small farmers out of existence as farmers, and 
transformed them into dependent wage-earners. "The finish- 
ing stroke to a rapidly decaying class was given by the fall in 
prices after the great Continental War (1815), following on 
the inflation of previous years ; and as their small properties 
came into the market, and no holders of their own class 
appeared to take their place, their lands went to swell the large 
farms that were now the typical feature of British agriculture. 
Here and there, an occasional representative of a once large 
and worthy body of men still remains (1895), but the English 
yeoman of the days of Henry V. (1413-1422), and Queen 
Elizabeth (1558-1603), as a class, has disappeared entirely."^ 
"In 1876, the number of owners of less than an acre of land 
in the United Kingdom (Great Britain and Ireland), exclusive 
of the metropolis, was officially returned at 852,408; of own- 
ers of more than an acre, at 321,386; total number of owners, 
1,173,794."^ As the total population of the United King- 
dom, exclusive of London, was at the same time, in round 
numbers, 28,000,000, the ratio of owners to the total popula- 
tion outside of London was about 1 to 24, and ratio of 
owners of more than an acre of land to the total population 

iGibbins, p. 279. Compare pp. 276-283. 
227ie Statesman's Year-Book, 1897, p. 66. 



lyO OUTLINES OF INDUSTRIAL HISTORY 

was about 1 to 87. To put these facts in another way, the 
total area of the United Kingdom is 120,677 square miles, 
77,233,280 acres. Subtracting from this acreage 5,500,000 
acres of waste and common land, the area of London, and the 
acreage of those owning less than one acre each, there is left 
over 70,000,000 acres owned by 321,386 persons, 217 acres 
each. Total population in the United Kingdom, outside of 
London, in 1876 was 28,000,000 (an estimate too low rather 
than too high) . 

Owners of less than 1 acre each 852,408 

Owners of an average of 317 acres each 321,386 

Total number of owners of land 1,173,794 

Total number not owning land 26,826,206 

These figures suggest something of the dependence in recent 
years of the great majority of the population in Great Britain 
and Ireland upon a few land owners, both for a dwelling place 
and for an opportunity to carry on any kind of production. 
It is only fair to state in this connection, however, that, while 
individual ownership of land is rare, the problem of securing 
admission to the land for larger numbers of people is attract- 
ing the attention of statesmen and of many social students. 
As a result of efforts already made, cooj)eration in fai'ming is 
being tried, and an increasing number of persons is securing 
the rental of small allotments of land. In 1885, the number 
of holdings in Great Britain of less than 50 acres was 392,203. 
"A Eeport of the Board of Agriculture for 1890 shows that 
this number had risen in 1889 to 409,422, and that, at the 
same time, there were 455,005 ordinary detached allotments 
under an acre, in addition to 262,614 cottage gardens of an 
eighth of an acre and upwards; and these, together with 
'potato-grounds,' and cow runs, bring up the total number of 
instances oi petite miUure in Great Britain to 1,300,746."* 
It is complained that the rent of these allotments is too high. 

'Marshall, Principles of Economics, vol. I, p. 699 — 2d. ed., 1893, 
The Macmillan Co., New York. 



THE FACTORY PERIOD OF INDUSTRY 171 

Taken altogether, the facts given show at least this mnch, 
that in modern England, unlike the custom in old feudal 
days, there is no general customary access to portions of Eng- 
lish soil for the great mass of Englishmen, either as partial 
owners or as tenants. A would-be owner or tenant must 
now enter the lists with all others like himself, and, on the 
basis of a new contract, bargain with the present owner for 
what he wants. If the conditions of the bargain are such 
that he can fulfill them, he secures access to the soil ; if not, 
he must remain a landless man. 

IX. MODERN CAPITALISM 

Mr. Hobson^ points out that five things should 

^Labor and** be Considered in a study of the cooperation of 

Business? Capital and labor in a transforming process: 

"(1) The ownership of the material; (2) the 

ownership of the tools ; (3) the ownership of the productive 

power; (4) the relations subsisting between the individual 

units of labor; (5) the work-place." Under the Family 

System, the materials and tools were owned by the head of 

each family ; the productive power was the physical strength 

of the man and his family ; their relations to each other were 

those of blood ; and the work-place was their own house. 

Under the Gild System, the material was sometimes owned 
by the master workman, and sometimes by the consumer ; the 
tools usually belonged to the workmen; the workmen still 
furnished their own productive power ; the relations between 
the workers were those of apprentice, journeyman, and 
master workman, who were usually neighbors and socially one 
about as good as another ; and the work-place was the labor- 
er's home, the home of the master workman, or the home of 
the consumer who was having the work done. 

Under the Domestic System, the tools usually belonged to 
the workman, but sometimes to the master workman, or 
to their common employer ; the material was owned by the 
^The Evolution of Modern Capitalism, p. 35, 



172 OUTLINES OF INDUSTRIAL HISTORY 

capitalistic employer; the motive power was still largely 
that of the workers; the relations between workers were 
still chiefly those of social equals, although the employer 
might be far removed from the workers, and the workers who 
performed one partial process might be unknown to those who 
performed another partial process ; the work-place was most 
commonly the home of the workers, or the home or small shop 
of the master workman. 

Under the Factory System, materials, tools, productive 
power, and work-place have passed completely out from the 
ownership and control of the wage-workers. The relations 
subsisting between the individual units of ordinary labor are 
too much those of different parts of a great productive mechan- 
ism, brought together from whatever homes they occupy, to 
go through, day after day, the same more or less automatic mo- 
tions. As for the interest of those who own the land required 
for the manufactory, of those who furnish the expensive plant 
in buildings and machinery, of those whose genius fuses all into 
a product desired by consumers, — the interest of all these in the 
human beings who form a part of the productive mechanism 
has a decided tendency to become the same as their interest in 
the rest of the establishment — simply that interest which 
leads them to try to get out of their investment the largest 
possible returns. That this tendency does not always work 
itself out to the naked conclusion suggested is no fault of the 
system itself. 

The phrase, "Factory System of industry," is 
tractive, Trans- primarily applicable to manufacture, but lum- 

porting, and . . . . . • •, 

Transferring beriug, mining, extcnsivc agriculture m its 
highest development, transportation, and trade, 
present nearly the same characteristics, in regard to the five 
points previously mentioned, at the present time as do the 
manufactures. With respect to capital, agriculture, as on the 
great wheat farms of Dakota, lumbering, as in Michigan and 
Oregon, and mining for coal, iron, copper, gold, and silver, 
require a great outlay for valuable land, forests, and mines, 



THE FACTORY PERIOD OF INDUSTRY 173 

for farming machinery, sawmills, and machinery for sinking 
shafts, raising coal and ore, and reducing the same; transpor- 
tation companies require an enormous outlay for right of 
way and roadbed, for locomotives, cars, machine shops, ofl&ces, 
freight houses, stations, steamboats, elevators, wharfs, etc. ; 
and the great transferring companies must have expensive 
sites in the very centers of human activity, immense buildings, 
fortunes in stocks of goods, and a whole subsidiary trans- 
portation equipment in the form of truck wagons, special cars, 
delivery wagons, etc. 

There is also connected with each of these great businesses, 
as a rule, a large number of persons who work away from their 
homes, have no property right in the plant, material, or 
product, and whose relations to their employers are largely 
impersonal, unsocial, and subject only to the conditions of the 
contract, which calls for a certain periodic cash payment on one 
side, and a certain number of daily hours of toil upon the other. 

In the great businesses of each of the typical economic 
groups, there is also a high degree of specialization or division 
of occupation, so that the productive process as a whole is 
divided into a great number of separate processes, each of 
which is continuously performed by the same person or group 
of persons. 

[Note. — The extent to which single immense businesses are 
now coming to unite under one management all the con- 
secutive processes of production — extractive, transforming, 
transporting, and transferring — is an interesting subject for 
investigation; for example, department stores, that do their 
own manufacturing; steel companies, that have their own 
iron mines; steamboats, railroads, and newspapers, that own 
forests, pulp and paper mills, transportation facilities, etc. 
See "The Outlook" for July 31, 1899.] 

Finally, each great business requires the generalship of 
some one person with great executive ability, to keep all the 
complicated details in harmonious adjustment to each other, 
and the products of the enterprise, as a whole, so adjusted to 



174 OUTLINES OF INDUSTRIAL HISTORY 

the future wants of consumers, that the net result shall be 
a gain instead of a loss. 

In spite of the enormous importance of capital 

Survivals from . . , , . » i -n 

Other Periods to the various tvpical businesses of the Factory 

of Industry to _, , _ , '' ^ i , -, t 

the vresent Period, the eyes must not be closed to the fact 

Time. 

that survivals from all the other periods of 
industry are still common. Perhaps the most notable among 
these are the various home manufactures of articles of clothing 
and rude tools for home use among farmers who live in remote 
places; the work of cobblers, plumbers, and custom tailors, 
whose industry has many points of similarity to industry under 
the Gild System; and, most notable of all, the industries 
carried on in accordance with what is now called the Sweating 
System, which is simply a perverted form of the old Domestic 
System. 
Partnership, The necessity for a larger investment than most 
cobperatioSI', pcrsous individually can make has led men 
^*^^' to combine their capital for large enterprises. 
The trading companies of various kinds which were formed 
long ago in England are illustrations of these combinations of 
capital. In this century, the growing importance of capital 
in production has led to the formation of more combinations 
of various kinds than the world ever before has seen. They 
exist now in nearly every community, and challenge the 
attention of all intelligent persons. They affect all classes, 
and are in process of such rapid development that anything 
that might be said of their extent to-day is likely to be far 
short of the truth to-morrow. 

Two things are evident: fii-st, we shall never go wholly 
back to earlier and more wasteful methods of production; 
general welfare lies not in trying to stop industrial consolida- 
tion and combination altogether. Second, it should be equally 
clear that all of us are stronger and of more importance than 
any of us — that mankind is more than a man or a few men, and, 
therefore, that the advantages of combination must not be 
wholly reserved to a single man or to a few men. Ways must be 



THE FACTORY PERIOD OF INDUSTRY 175 

fonnd to socialize the spirit of corporate enterprises, and to 
distribute their benefits justly among all concerned. In the 
language of the formula of production worked out in Part I : 
Society + man + capital + land = utility; it must be in 
subordination to the will of society that the individual man 
or corporation uses implements upon land to satisfy want. 
The part cannot be greater than the whole. 

The It is hardly necessary to state more definitely 

Undertaker, ^j^^^j^ already has been stated that the impor- 
tance of the industrial manager to modern production has 
grown with the growth of the importance of capital. The 
business of a modern hotel, of a department store, of a steel 
manufactory, of a cotton factory, of a transcontinental rail- 
road, of a metropolitan bank, requires such soundness of judg- 
ment, foresight, knowledge of human nature, ability to classify 
and dominate details, and rapidity and boldness of action, as 
have belonged of old to great military commanders ; accordingly 
these men are sometimes aptly called captains of industry. 

The term also serves to remind us of the competitive nature 
of modern industry, which often and often has allowed a 
conquering captain to drag an unsuccessful antagonist— no 
longer a captain, but a dependent wage-earner — after the 
chariot of his own economic triumph. 

In proportion as the size, complexity, international char- 
acter, and uncertainty of business have increased, since the 
early days of manufacture of wool for foreign markets, 
under the Domestic System, until the present day, the oppor- 
tunities of economic conquests opening to the Napoleonic cap- 
tains of industry have grown greater, and the necessary corps 
of subordinate commanders has increased. 

X. WAGE-EARNEBS UNDER THE FACTORY SYSTEM 

So far as materials, tools, motive power, and 

Increase of i i i, i • i -i. i. • 

Wage-earners, work-place havo bccomc expensive has it been in- 
creasingly difficult for the ordinary man to furnish 
them, and thereby set up in business for himself. The small 



176 OUTLINES OF INDUSTRIAL HISTORY 

far ma in England gave way to larger ones, and the former 
owners became agricultural laborers ; as land becomes expensive 
in the United States, the same process is going on; the small 
manufacturer, carrier, and trader have everywhere given way 
before larger competitors, and are now either wage-earners or 
independent workers in subordinate and out-of-the-way corners 
of the various great fields of production. The majority of the 
producers of material wealth in England to-day are wage- 
earners, with hardly any possibility of being able to set up in 
business for themselves as individuals. To a less degree, a 
similar state of things has come to exist in the United States. 
With the exception of the cultivation of the soil, it seems not 
too much to say that only the odds and ends of modern 
material production remain in the hands of independent pro- 
ducers who possess small capital. 

Freedom to Legally, the wage-earner was never so free to go 
Wander. -^herever he chose as he has been during the 
latter half of the period of the Factory System. In the Ameri- 
can colonies, during the preceding period, the complex jurisdic- 
tion of many colonial authorities, added to the English control 
in America, resulted in many practical restrictions upon the 
freedom of movement of wage-earners. The slavery system and 
the system of indentured servants also produced similar effects. 

In England, during feudal days, the servile population was 
not free to leave the manor on which it was born. When 
these feudal bonds become too weak to hold, the Statutes of 
Laborers of the fourteenth century substituted restraining 
legislation to accomplish the same purpose. The gild regula- 
tions of medieval towns also tended in the same direction. 
The Elizabethan Statutes of Apprentices and Poor Laws, and 
the Law of Settlement of Charles II. (1660-1685) more effec- 
tually restrained wage- workers from free migration. Although 
nominally repealed before, these laws continued to be of great 
practical effect until the Poor Laws were changed in 1834. 

Although at last free in theory to go wheresoever he will, 
the wage-worker of to-day is often ignorant of places where 



THE FACTORY PEEIOD OF INDUSTRY l'J'7 

help is wanted, has little or no money to go when he knows 
of work in a distant place, is bound to one locality by ties of 
family, religion, and occupation, yet frequently is turned out 
of his job by improvements in machinery and violent fluctua- 
tions in the demands for such services as he can render. 
Only a man who is possessed of great economic adaptability^ 
may now feel at all sure of uniting with his new freedom of 
migration a reasonable certainty of continuous employment. 
Homes of The primary fact respecting the homes of work- 
workers.'' ers in the nineteenth century has been men- 
tioned incidentally in connection with the paragraphs on con- 
centration of labor in modern factories, and the tendency of 
population toward cities and towns. Especially in manu- 
facture, transportation, and trade, workers in large numbers 
have been obliged to find homes within small areas, in order 
that the distances between their homes and places of work might 
not be too great. From this fundamental fact have come 
the overcrowding, and the location of homes in unsanitary 
places, within sight and sound and smell of all kinds of proc- 
esses and factories. The great mass of modern wage-workers 
have become life-long exiles from the sunshine and fresh air 
of country life. At their worst, the homes of wage-workers 
have, therefore, often more than justified the unspeakable 
accounts of tenement house life, familiar to us all. At their 
best, they have enjoyed the benefits of the most perfect sani- 
tary science of the day, have allowed their occupants higher 
social, educational, and esthetic privileges than can be 
enjoyed by families in country isolation, and have demon- 
strated the possibility of bringing into crowded city areas 
something of the health and inspiration of country sunshine 
and vegetation.^ 

Kelley, The Working Boy — "The American Journal of Soci- 
ology," November, 1896. 

^See Report of Department of Labor, No. 8. 

*For comparison of Domestic System with Factory System see 
Wright, The Factory System, Tenth Census of the United States, 

vol. n. 



178 OUTLINES OF INDUSTRIAL HISTORY 

The bicycle and trolley car are also recent factors of great 
significance in this question of the location of homes of mod- 
ern wage-earners at a distance from their working place. 

Durins: the first years after the general intro- 

'Waees and o .^ o 

Conditions of duction of the Factory System in England, 
there was a period of low wages and hard condi- 
tions of labor which it is appalling to read about even now. 
"The tale of their sufferings may be studied in the Blue-books 
and Reports of the various Commissions which investigated the 
state of industrial life in the factories, mines, and workshops 
between 1833 and 1842 ; or it may be read in the burning pages 
of Engel's State of the Worki?ig Classes in England, in 1844, 
which is little more than a sympathetic resume of the facts set 
forth in oflficial documents. We hear of children and young 
people in factories overworked and beaten as if they were 
slaves ; of diseases and distortions only found in manufactur- 
ing districts ; of filthy, wretched homes, where people huddled 
together like wild beasts ; we hear of girls and women work- 
ing underground, in the dark recesses of the coal mines, 
di'agging loads of coal in cars where no horses could go, and 
harnessed and crawling along the subterranean pathways like 
beasts of burden. Everywhere we find cruelty and oppres- 
sion, and in many cases the workmen were but slaves, bound 
to fulfill their master's commands, under fear of dismissal and 
starvation. Freedom they had in name; freedom to starve 
and die ; but not freedom to speak, still less to act, as citizens 
of a free state. They were often even obliged to buy their 
food at exorbitant prices out of their scanty wages at a shop 
kept by their employer, where it is needless to say they 
paid the highest possible price for the worst possible goods. 
This was rendered possible by the system of paying workmen 
in tickets or orders upon certain shops, which were under the 
supervision of their employers. It was called the 'truck 
system'; and was at length condemned by the law (1887), 
after many futile attempts had been made to suppress it."^ 
iGibbins, pp. 433, 433, 



THE FACTORY PERIOD OF INDUSTRY 179 

In the decade between 1830 and 1840, similar but less 
deplorable conditions became common in the mannfactnring 
centers of the United States, especially in New England. '^ 
The hours and conditions of labor, therefore, became subjects 
of legislation in both England and the United States, but the 
question as to the amount of wages has been in the main 
untouched by legislation in this country. 

Parliament declined to interfere with wages in 1813, 
by its repeal of the statutes which had hitherto provided 
for the regulation of wages by justices of the peace. Since 
that date, wages have been legally adjusted by a con- 
tract between the employer and the employed. In the 
United States, since the Eevolution, the amount of wage 
has been considered to be a matter for contract and not for 
legislation.^ 

The struggle between employers and employed over the 
question of wages and conditions of labor has been continued, 
and has gone now in favor of one side and now in favor of 
the other, as conditions have changed. On the whole, wage- 
earners, both in England and the United States, have been 
gaining an increasing wage during the last fifty years. Still, 
production has more than kept pace with this rise in wages, 
60 that wage-earners get a decreasing fraction of the total 
value of the net product.^ 

Again, statistics of the average rate of wages received often 
give an exaggerated impression of the actual wages, because 
they do not take suf3Bcient account of the periods of non- 
employment, which are frequent. A wage that would be 
entirely satisfactory if received for every working day through- 
out the year, often becomes painfully inadequate because of 
periods of enforced idleness. "It is a prosperous year, indeed, 

'MacLean, Factory Legislation for Women in the United States, 
— "The American Journal of Sociology," September, 1897, pp. 185, 
186. 

^Stimson, p. 17. 

'Wright, Industrial Evolution of the United States, pp. 191, 193. 



180 OUTLINES OF INDUSTRIAL HISTORY 

when the average wage-receiver aggregates forty-four full 
weeks employment." ^ 

As to the improvement in conditions and 
Factory hours of labor, especially in factories, much 

has been done, both in England and the United 
States, partly through the direct efforts of those who are 
employed, but far more through legislation. In England, this 
legislation has been going on ever since 1802, and relates 
especially to such conditions as the following : '^ 

1. The minimum age for children who can be employed in 
factories. 

2. Limitation of the working day for children and women. 

3. Prohibition of night work to children. 

4. Compulsory education of children. 

5. Sanitary conditions of factories and other places of work. 

6. The protection of employees against accident, by requir- 
ing greater precautions in factories, mines, etc. 

7. The limitation of the hours of work for men. 

8. Employers' liability for losses due to death and other 
accidents of laborers while at work. 

The Acts of Parliament of a similar tenor to that of the 
legislation just mentioned have been mainly in the interests of 
wage-workers. In the aggregate, they have been very numer- 
ous, and cover nearly the whole period from 1802 until 
the present time. Taken together, they form a great body of 
statutes known as the English Factory Laws. 

In the United States, similar legislation began as early as 
1842 in Massachusetts, by limiting the hours of work for chil- 
dren under twelve to ten hours per day. Since that time, 
factory legislation has made some progress in the various 
states, though by no means so much as in England. Each 
state here is a law unto itself, and uniformity does not exist. 
The following table must serve as a suggestion of what has 
been accomplished already, and also of what remains to be done: 

iSpahr, p. 101. 

''Hobson, The Evolution of Modern Capitalism, pp. 321-328. 



THE FACTORY PERIOD OF INDUSTRY 181 

"States having inspection laws .....12 

States having women inspectors 6 

States regulating hours of labor 33 

States having sanitary laws 13 

States providing seats for women employees 33 

Note. — Only seven regulate hours of women over 18 years, and 
only five of these, hours of women over 31 years." * 

Various laws against combinations of wasre- 

The Efforts of ° ® 

Wage-Earners earners for tne purpose of securing higher 

at Combination. o o 

wages and better conditions of work, were 
passed in England from the time of Edward VI. (1547-1553), 
but these were all summed up in the famous Combination 
Laws of George III., in 1800. These "strictly forbade all 
combinations, unions, or associations of workmen for the pur- 
pose of obtaining an advance in wages or lessening the hours 
of work. "^ 

In 1824 these laws were repealed, although the very next 
year Parliament declared illegal any action that might result 
from combinations of workers. From 1838 to 1848, the 
Chartist movement grew strong, and the wage-workers 
demanded a Charter, by which vote by ballot, abolition of 
property qualification for voters, the payment of members of 
Parliament, and universal suffrage, should be guaranteed. 
When this movement partially died out, trade unions were 
more rapidly formed, and in 1871 legalized by Act of Parlia- 
ment. In England, therefore, the full right to combine in 
their own interests has been freely enjoyed by workers only 
about a quarter of a century. 

The number of wage-workers in England who were mem- 
bers of trade unions in 1892 is put by Mr. Sidney Webb^ at from 
1,500,000 to 1,600,000. Although this is only about four per 
cent of the total population, it would be a much higher per 
cent of the adult working males. In some counties, we are 

* MacLean, p. 203. 

"Gibbins, pp. 416-431. 

' The History of Trade- Unionism, p. 409. 



182 OUTLINES OF INDUSTRIAL HISTORY 

told, over one-half the total nnmber of working men are 
members of unions. "The Trade-union world is, therefore, 
in the main, composed of skilled craftsmen in densely popu- 
lated districts, where industry is conducted on a large scale. 
About 750,000 of its members — one-half of the whole — belong 
to the three staple trades of coal mining, cotton manufacture, 
and engineering, whilst the laborers and the women workers 
remain, on the whole, non-unionists." ^ 

In general, it may be said truly that the tendency toward 
combination and cooperation among English wage-earners is 
growing stronger all the time. 

In the United States, also, combinations of workers followed 
the introduction of the Factory System. Labor unions proper, 
designed to improve conditions of men as laborers, began in 
the United States about 1825.^ From that time, they grad- 
ually increased in number and importance, in separate groups 
of occupations, until 1869. At that time the combination 
of laborers known as the Knights of Labor was organized 
in Philadelphia. This marks a new epoch in labor organ- 
izations in this country, for it gives a sort of Federal union 
to the separate trade unions, and even to unorganized men. 
Examples of other gi'eat labor organizations in recent years 
are the Federation of Labor, the United Mine "Workers of 
America, which, under the leadership of John McBride, called 
from 150,000 to 200,000 men out of the coal mines in 1894; 
and the American Eailway Union, which, under the leader- 
ship of Eugene V. Debs, in the same year, involved 100,000 
or more railroad men in a historic strike. 

Such great combinations of workers have often performed 
acts of intimidation, restrained trade and transportation of the 
public as a whole, and performed numerous other acts that 
have been declared illegal by the courts. But "combina- 
tions of laborers or employers, in their collective capacity, to 

' Webb and Webb, p. 430. 
" Ely, pp. 39, 40. 



THE FACTORY PERIOD OF INDUSTRY 183 

fix wages or make other rules binding among themselves, are 
legal." ^ This has been true since the Revolution. 

*'The progress of the labor movement may be compared to 
the incoming tide. Each wave advances a little further than 
the previous one ; and he is the merest tyro in social science, 
and an ignoramus in the history of his country, who imagines 
that a permanent decline has overtaken organized labor." ^ 

The significance of these combinations in determining 
wages and conditions of labor will be further discussed in 
Part III. 

The ratio of those who have taken part in the 

The Political . . ^ _ , . 

Status of government to the total population of England 

Wage-earn«r8. 

has greatly increased during the centuries since 
King William I. The wresting of Magna Charta from King 
John (1199-1216) and its thirty or more ratifications from 
succeeding sovereigns, the growth of the English Parliament, 
the rebellion against Charles I. (1625-1649), the election of 
William and Mary (1689-1702) as sovereigns of England, the 
extension of suffrage by the Eeform Bill of 1832, and its 
still further extension by the Acts of 1884-1885, are repeated 
evidences of the success of the English people in their efforts 
to gain an increasing share in the administration of national 
affairs. Almost complete manhood suffrage exists in England 
to-day in Parliamentary elections, and almost complete man- 
hood and womanhood suffrage exists for local elections. 
Taken altogether, suffrage is more extended in England than 
in the United States. In both countries, the power of wage- 
earners through the ballot box is now practically determined 
by their numbers and the wisdom of their trusted leaders. 'No 
measure in either country can long remain in force without 
the support of the wage-earner's vote. His political enfran- 
chisement is well-nigh complete. Of the rise of successive 
classes of the English people to political power, a recent writer 
says: "With the final dismissal of the legitimate monarch, 

^Stimson, pp. 167, 168, and following. 
*El7, p. 90.' 



184 OUTLINES OF INDUSTRIAL HISTORY 

James II. (1685-1688), and the substitution of a foreigner 
in his place, the English upper classes secured that constitu- 
tional ascendency in the government of the nation which 
remained with them for just one hundred and fifty years; 
which devolved upon the middle class for just another fifty 
years in 1833; and has now been transferred — with what 
results it is yet too early even to attempt to forecast — to the 
laboring population." ^ 

XI. Ll^AL SOCIETY AND PRIVATE BUSINESS ENTERPRISES: FREEDOM 
OF CONTRACT AND THE RIGHT OF PRIVATE PROPERTY 

Although the preamble to the Second Act 
Upon Inter- of Cougress, Under the Constitution, stated one 
ra e. ^^ ^^^ objects of the law to be "the encourage- 
ment and protection of manufactures," still the idea of a tariff 
for protection, as contrasted with a tariff for revenue, gained 
ground but slowly for about thirty years. It then became a 
party tenet, and, in 1824, an act was passed which "was an 
advance on all preceding tariffs in its consistent design to 
exclude foreign competing goods from American markets."* 
The southern members considered it "sectional, unconstitu- 
tional, and unjust." In 1828, the protective idea was still 
further emphasized. After that date, until the Tariff Acts of 
1861, this idea rather lost ground. Since 1861, the Republi- 
can party has persistently upheld the doctrine of protection, 
and the Democratic party has denounced it. In the national 
campaign of 1896 the respective party platforms contained 
the following statements: Republican — "We renew and 
emphasize our allegiance to the policy of protection as the 
bulwark of American industrial independence and the founda- 
tion of American development and prosperity;" Democratic — 
"We hold that tariff duties should be levied for purposes of 
revenue, such duties to be so adjusted as to operate equally 

'Taylor, Introduction to a History of the Factory System, p. 
340—1886, Bentley & Son, London. 

'Johnston, History of American Politics, p. 100— 3d ed., 1892, 
Henry Holt & Co., New York. 



THE. FACTORY PERIOD OF INDUSTRY 185 

throughout the country, and not discriminate between class or 
section, and that taxation should be limited by the needs of 
the government, honestly and economically administered." 

For nearly the whole period of our national life, therefore, 
the doctrine of interference, for the supposed national good, 
with international trade and domestic business of private 
persons has had ardent and, during much of the time, 
triumphant advocates in the United States. 

In England, the Napoleonic wars furnished the occasion for 
many restrictions upon foreign trade. Likewise, the famous 
Corn Laws, enacted from 1773 to 1815, and repealed in 1846, 
were a perpetual obstacle in the way of would-be exporters 
and importers. 

These bare statements of fact suggest the numerous modi- 
fications, not only of trade contracts, but also of contracts for 
manufactured products and for products of extractive indus- 
tries, which the legislation of England and the United States 
has caused during the period now under consideration. 
Private business in both countries has always been a very 
different thing from what it would have been had no laws 
about international business been made by political society. 
The Growth of ISTeverthcless, in spite of these restrictions, there 
* "tLt^Ai^"^' was growing up in England, during the last of 
PoUcy.i ^^^ eighteenth century and the first of the nine- 
teenth, a belief that government interference with productive 
enterprises of all sorts resulted in more harm than good ; in 
fact, that the self-interest of individuals, if allowed a free 
reign in economic matters, would work out the greatest possible 
good to all parties concerned. Therefore, contracts between 
landlords and tenants over rents, between lenders and borrow- 
ers over interest, between employers and employees over wages, 
and many other contracts, were left more to the contracting 
parties themselves than ever before had been the case. The 
common saying, borrowed from the French, was, "Let things 
alone; let them take their own course. " The repeal of the 

^Consult index of any books at hand on political economy. 



186 OUTLINES OF INDUSTRIAL HISTORY 

Corn Laws, although in part due to the influence of manufac- 
turers who wanted cheap food for their employees, was also 
due in part to a belief in the soundness of this principle. 

Still, laws that were inconsistent with laissez /aire were not 
confined to those regulating international trade. Laissez 
/aire was never freely practiced. Combinations of employers 
to keep wages down and the condition of wage-workers 
unfavorable, were allowed in England, while combinations of 
workers to raise wages and to improve conditions of wage-work- 
ers were, as we have seen, forbidden. Because of such legis- 
lative inconsistencies, and also because of the fundamental 
fact that contracts, as a rule, turn out well for both parties 
only when both parties are equally well equipped for the 
economic struggle of making a contract, we have seen that 
the condition of wage-workers, both in England and the 
United States, grew, in many cases, so deplorable that a 
reaction against laissez /aire set in, and a long course of 
factory legislation was entered upon in both countries, the 
end of which is not yet. Anti-monopoly and anti-trust legis- 
lation has also been very frequent in the United States. ^ 

Furthermore, contracts of many kinds, especially wage con- 
tracts, are made more and more between a combination of men 
on the one side and a combination of men on the other side. 
Thus, through voluntary action in groups, as well as by legis- 
lation, great social restriction is placed upon individual free- 
dom of contracts. 

In brief, it may be said : 

1. Society, through its law-making bodies, in both England 
and the United States, still interferes with individual freedom 
of contract, that is, with private business. 

2. These legal interferences are now less with the details of 
contracts than with the limits within which the contracting 
parties may bargain with each other. 

3. Men also voluntarily limit their own freedom of contract 

'Forrest, Anti-Monopoly Legislation [in the United States, — "The 
American Journal of Sociology," January, 1896, pp. 411-425. 



THE FACTORY PERIOD OF INDUSTRY 187 

by social agreements, associations, and combinations of many 
kinds. 

4. In spite of all restrictions, the economic relations of men 
to each other during the Factory Period have been determined 
less by custom and by past conditions, and more by contract 
on the basis of existing conditions, than ever before. 

During this period, individuals have been pro- 

Social Property ° ^ ' . -^ . 

versus Private tccted by govcmments m the complete exercise 

Property. > . 

of the right of property over almost every species 
of good that can, by its nature, be exclusively appropriated 
by an individual. Both natural and legal persons (corpora- 
tions) have exercised the exclusive right of property over 
natural resources, accumulations of wealth, economic proc- 
esses, charter privileges, inventions, etc., to such an extent 
that certain classes of thinkers have been led to the opinion 
that the general welfare demands radical restrictions upon it. 
Socialists, for example, believe that all natural resources, 
exclusive economic privileges, and capital, should be social 
rather than private property. 

In a democratic country, as the opinion in favor of the private 
ownership of anything prevails, so are the legislative and admin- 
istrative powers of government enlisted to enforce that opin- 
ion. On the other hand, just so far as the opinion in favor of 
public or social ownership of anything prevails, government 
tends to enforce that opinion. 

It is necessary, therefore, to state further in this connection, 
with all the emphasis possible, that side by side with the facts 
of private ownership during this century there exists also a 
great body of facts concerning more or less successful attempts 
at social ownership. Consequently, while the question of 
private ownership versus social ownership is being asked in a 
multitude of particular instances with an altogether new 
insistence in these days, in giving an answer in any particular 

' Consult recent files of such magazines as "The Forum," "Review 
of Reviews," and especially "Municipal Affairs," for articles on 
various forms of social ownership. 



188 OUTLINES OF INDUSTRIAL HISTORY 

case even the ordinary voter does not need to decide blindly or 
dogmatically. The experiences of various cities in owning 
their own street railways, light and water plants, parks, baths, 
museums, and other kinds of property; and the experiences 
of countries with the telegraph, railroads, and steamship 
lines, are already sufficient for the formation of an intelligent 
opinion respecting the probable results of similar proposed 
attempts in the voter's own town, city, or country. 

Among all the motives which can be seen to have stimulated 
the great variety of economic legislation glanced at In these 
pages, the highest has been a genuine desire for the welfare 
of all the persons in the communities affected by that legisla- 
tion — for social welfare rather than for private welfare. From 
this point of view, two criticisms may be made : 

1 . Sometimes the real purpose of legislation was to secure 
private welfare rather than social. 

2. Sometimes too little care was taken to form a sound 
opinion as to the probable results of a law. 

Suggestive ^' W^^t accounts have you read of early 
Questiom. attempts to introduce machinery of different 
kinds into the United States? Eelate some of these stories. 

2. What novels have you read which describe the changes 
in any industry from hand methods to machine methods 
of production? Give, in brief, the story of some one of 
them. 

3. Give accounts of some of the consolidations of railways, 
steamship lines, or any other business enterprise of which you 
have personal knowledge. 

4. Why did these combinations take place? Who brought 
them about? 

5. What laws were made to help or to hinder these consoli- 
dations? With what results? 

6. Give accounts of the transportation of fresh meats, fruits, 
and vegetables, long distances. How were these things done? 
Why were they done? 

7. Give illustrations of changes in agricultural methods, 



THE FACTORY PERIOD OF INDUSTRY 189 

crops, fertilizers, etc., -vvhicli have taken place in any locality. 
Why were these changes made? 

8. Describe the process by which any persons known to you 
have been led to give up business for themselves and to go to 
work for somebody else. In what respects are they now better 
off than before? In what respects worse off? 

9. Show how a man in New York or London can buy a 
cargo of wheat in Chicago, hire a boat on which to carry it, 
hire men to load the boat, pay for the wheat, get it insured, 
and know that it is on the way toward him, in a few hours 
time. 

10. Ask business men for the quickest time known to them 
in some such transaction. Tell how it was done. 

11. Compare these facts with what could have been done a 
hundred years ago. 

12. Make inquiries among the most intelligent people 
about you to find out what they know of such industrial his- 
tory as has been given in Part II. 

13. Make similar inquiries among trade union members. 
Where do you find the best informed men? 

14. Give all the examples known to you of attempts on the 
part of employers to make employees more interested in the 
business.^ 

15. How have these attempts succeeded? 

16. Give as many illustrations as you can, from your own 
observation, of men who are now working according to the 
methods of the Home System, Gild System, Domestic System. 

17. Why are they so working? What kind of a living do 
they get? 

18. Describe any attempts known to you that are being 
made to get people out of the cities to become extractors. 
Are they successful attempts? 

* Howerth, Profit-Sharing at Ivorydale — July, 1896 ; Monroe, 
Possibilities of the Present Industrial System — May, 1898 ; Monroe, 
Profit-Sharing in the United States— Maj, 1896; all in "The 
American Journal of Sociology . " 



190 OUTLINES OF INDUSTRIAL HISTORY 

19. Ask people who have gone from the country to the city 
why they went. Give results of change. 

20. Describe some attempts which are being made to make 
any city a better place in which to live. 

21. Read the advertising and want columns of a daily paper, 
and make a list of the different kinds of services that can 
be bought now. How does the list compare with the services 
that could be bought a century ago? What has made the 
difference? 

22. Of what value is a sketch of industrial history in 
an attempt to understand the present industrial system? 
Explain. 

23. When a voter is trying to settle the question as to his 
vote for or against social ownership of gasworks, water works, 
etc., for his city or town, ought he to seek to aid the public 
as a whole — social welfare — or merely the private welfare of 
some group of men or section of the town? How can he be 
sure of his intentions? 

24. What care ought he to take to inform himself, from the 
experiences of other places that have tried both social owner- 
ship and private ownership, as to the probable result in his 
own town? 

25. If the intention of voters is to secure the social welfare, 
and great care is taken to get all possible information, what 
can you say of the seriousness of mistakes likely to be made? 

[Note. — For detailed suggestions as to further social eco- 
nomic study, accompanied by selected bibliography, see 
Howerth, A Programme for Social Study, "The American 
Journal of Sociology," May, July, and September, 1897. 

For valuable bibliography on municipal questions see 
Brooks, Bibliography of the Sweating System, ** Municipal 
Affairs," vol. I. 

For description of social economics in ofl&cial publications 
of the United States see Wright, Contributions of the United 
States to Social Science, " The American Journal of Soci- 
ology," November, 1895.] 



PAET III 

ELEMENTS OF ECONOMIC THEOEY 



Chapter I^ 

utility, value, an"© conteacts 

Introductory 1. Show that all ffoods are not equally necessary 

Suggestions *= ^ •' -^ 

and Questions, to the support 01 human lite. 
2. Mention several commodities that differ in this respect. 

1 Very few references will be cited in Part III. It is earnestly 
recommended that a small library of the best books on economics be 
secured, and that each pupil consult at least one of these books by 
means of its index as the text is read. The following are among 
the best for this purpose : 

Bullock, Introduction to the Study of Economics; Davenport, 
Outlines of Elementary Economics — The Macmillan Co., New York; 
Ely, Outlines of Economics, College edition — Eaton & Mains, 
Boston; Laughlin, The Elements of Political Economy — Ameri- 
can Book Co., New York; Marshall, Elements of Economics of 
Industry — The Macmillan Co., New York; Walker, Political Econ- 
omy, briefer course — Henry Holt & Co., New York. 

"As much of the original material can be had for the asking, 
there is no reason why every library should not be abundantly sup- 
plied with it. First, there are the financial columns of the news- 
papers — so neglected by the general reader. BradstreeV s and the 
Commercial and Financial Chronicle give similar matter much more 
fully, but they are expensive. By keeping on the blackboard the 
current quotations for sterling exchange, the rate of interest on 
call loans, and the prices of silver, wheat, cotton, making the work 
one of cooperation by the class, material will be at hand to illustrate 
many a delicate point. Bank statements can be found in the news- 
papers, or on leaflets distributed directly from the banks; these 
should be studied until they are understood. City finance reports 

191 



192 ELEMENTS OF ECONOMIC THEORY 

3. Make four or five groups of men's wants, and arrange 
them in the order of the necessity of their satisfaction to the 
continuance of life. 

4. Do men ever make gi'eater efforts to obtain goods not 
necessary to life than to obtain those that are necessary? 
Illustrate. Give reasons for such action. 

5. How does a man who produces most of the utilities he 
consumes decide when to turn from the production of one to 
that of another? 

6. How do boys decide whether to play base-ball or tennis 
if the choice is offered? Will the same boy decide the same 
■way every time? Why? 

7. What use did you make of your last month's allowance 
of spending money? Why? 

8. Will you spend the allowance of next month in the same 
way? Why? 

and state auditor's reports bring the student into touch with his 
immediate surroundings. The Consular Reports, issued by the 
Department of State, give information about industrial conditions 
in foreign countries. The Bulletins and Reports of the Department 
of Labor constitute a mine of information on the labor question. 
The Treasury Department issues many valuable documents ; among 
them is a handy little pamphlet about coinage, currency, and the 
production of the precious metals ; also copies of the recent tariff 
acts. The Bureau of Statistics issues the Statistical Abstract of the 
United States, an annual volume of over 300 pages ; this is the most 
valuable collection of material for the use of elementary students 
that can be foimd. Some of the numbers of Sound Currency may 
be used without partisanship, such as 'Currency Statistics' and 
'Coinage and Currency Laws of the United States' ; the latter is 
invaluable." — Clow, Economics as a School Study — Economic 
Studies, vol. IV, no. 3, pp. 230, 231, American Economic Association. 
Many of the most earnest weeklies and monthlies among the peri- 
odicals also contain frequent articles of great interest and value to 
students of economics. Some such articles have been cited in the 
list of periodicals at the end of Part III. Such material is access- 
ible to all, but should not be read to the exclusion of some more 
complete statement of economic theory than has been attempted in 
Part III. 



UTILITY, VALUE, AND CONTRACTS 193 

9. Can you always buy the same amount of a particular 
thing for the same amount of money? Why? 

10. Why do boys "swap" jackknives for marbles? 

11. Is a purchase usually beneficial to both buyer and 
seller? Why? 

12. Are there exceptions to the truth of your statement? Why? 
What is Here '^^^ ^^^ questious to which a definite answer 

Attempted, ^[n j^g given in this chapter are: (1) What 
determines the particular good which a man will first strive to 
obtain, and when will he turn from seeking this good to pur- 
sue another? (2) What determines the amount of one com- 
modity that can, at a certain time, in a certain market, be 
exchanged for a definite amount of another commodity? 

Two Factors ^^ auswcr to the first question, it may be said in 
Present. general that men strive to possess desirable 
things according to the intensity of their desires for them. 
But the intensity of any person's desire for a special good at a 
special time depends upon : (1) the kind of utility it has — 
that is, utility to satisfy hunger, thirst, cold, desire for knowl- 
edge, companionship, beauty, spiritual uplift, etc. ; (2) the 
quantity of that kind of utility which has already been 
appropriated toward the satisfaction of this desire. 

luustrations of ^ ^^^S^J ^^Jy ^^ ^u Orchard, finds the first big 
**^^ Quantfty* **' ^®^ ^PP^® intensely Satisfactory. The second is 
on Desire, gcarccly Icss SO. But, if he eats a third and a 
fourth and a fifth, he reluctantly admits to himself that he 
doesn't like apples so well as he thought he did. In compar- 
ison with hunting or nutting, going over to see Tom on the 
adjoining farm, or even following the men in the harvest 
field, eating apples soon ceases to be attractive. What youth 
does not remember his disgust at himself at losing his appetite 
before he had cleared the table of all the good things that 
load American tables on Thanksgiving day? Van Bibber, in 
one of Richard Harding Davis's stories, makes use of this 
peculiarity of human want in forcing a hungry beggar to eat 
to satiety as a punishment. The utility of food in this case 



194 ELEMENTS OF ECONOMIC THEORY 

became negative. "Enough is as good as a feast," "Familiarity 
breeds contempt," and, "Too much of a good thing" are 
sayings which had their origin in universal human experience. 
Desire for any particular thing usually grows less with con- 
tinued consumption of its utility. 

In the case of the boy and the apples, the last apple eaten 
and the first one left uneaten are often called "marginal." 
If he had found plums as well as apples in the orchard, the 
decision to eat no more apples would probably have been 
earlier, and numbers two and three, instead of five and six, 
might have been the marginal apples. In any case, he would 
stop eating apples the moment his satisfaction from that 
process became less than the satisfaction from doing some- 
thing else. 

A person who is free to do as he chooses and can by effort 
satisfy wants of great variety chooses first the satisfaction of 
that want which at the time he feels most keenly. In vaca- 
tion time, when the student is free to follow his own whim, 
he plays tennis, golf, and base-ball; swims, rides his wheel, 
eats, reads, and tramps, as the desire for one thing or another 
is more keenly felt. 

Absolute utility ^^ ^® ^®^® ^^ classify different goods from the 
wuh^Effectfve V^^^^ ^f vicw of the preservation of human life, 
utility.! some would be found more necessary to life 
than others. For example, food, air, and water, and clothing 
and shelter in cold olimates, are absolutely necessary to life. 
On the other hand, many forms of service which tend to satisfy 
intellectual, esthetic, and spiritual wants are not necessary to 
the continuance of the physical life of man. In a true sense, 
then, those things which are necessary to the continuance of 
life may be said to possess a high intrinsic, or absolute, utility; 
while those things which are not necessary to life possess a 
low absolute utility. Goods might, then, be arranged in a 
long series, from those possessing the greatest absolute utility 

'Compare (using index) Clark, The Philosophy of Wealth— Ginn 
& Co., Boston. 



UTILITY, VALUE, AND CONTRACTS 195 

to those possessing the least. If a man lacks all kinds of 
goods, he, as a rule, strives to obtain first those which have the 
highest absolute utility. The human race has done similarly. 
It is not intended here to cover up the fact that certain men 
have, all through the centuries, given up everything they pos- 
sessed, even physical life, for the sake of freedom to think and 
worship as they thought right. Wherever men and women 
have had to choose between being something less and having 
something less, many noble souls have always been ready to 
have less and he more. So long as men have life, however, so 
long as their being something depends upon a continuance of 
that life, even the noblest buys bread, rather than poems, with 
his last nickel. It is in view of the dependence of the intel- 
lectual and spiritual life of a man upon his physical life that 
the absolute utilities of food, clothing, and shelter have been 
called highest. Only as men and races have been able to 
keep the clamorous desires for food, clothing, and shelter 
somewhat satisfied by supplies of appropriate goods, have 
desires for knowledge, beauty, and spiritual insight usually 
made themselves felt. 

By adding to the quantity of a good whose absolute utility 
is highest, a person may, for the time, feel more keenly a 
desire for something else whose absolute utility is low. If the 
quantity of anything whose utility ia high absolutely is so great 
that the absence of a certain amount does not appreciably take 
away from his enjoyment, its effective utility to him, at the 
moment, is low. On the other hand, if the quantity of a 
thing with low absolute utility is small, the lessening of that 
quantity may take away much from his enjoyment, and the 
effective utility of it at the time therefore be high. Not in 
proportion to the absolute utilities of goods, but in proportion 
to their effective utilities, do men strive to obtain them. 
When the quantity of a thing whose absolute utility is high 
has become so great that another thing, with perhaps lower 
absolute utility, has a higher effective utility, a man turns 
from his effort to secure more of the first and works for 



196 ELEMENTS OF ECONOMIC THEORY 

tlie second. Taking one hour with another and one day with 
another, he tries so to apportion his efforts that the effective 
utility of one thing will be the same as that of another ; in 
other words, so that one want will not be felt more keenly 
than another. The human race is continually making the 
same effort. 

Some men and some nations struggle hard to 
sa«8faction "keep the wolf from the door," while others are 
""by^Aii.*'** seldom hungry, cold, or unsheltered from a 

storm. Certain classes of wants are commonly 
felt by the poor, and very different wants are at the front with 
the rich. But among all the wants realized most keenly by 
each, effort is so apportioned that one is nearly of the same 
intensity as the others. This is done very largely by varying 
the quantity factor in effective utility. 

A student with an allowance has to decide how 

Kxamples In- . , i . , . 

voiFing the Use to Spend it. With hini the choice is not between 

of Money. 

the money and one thing which it will buy, but 
between one thing which it will buy and other desirable things 
which may be bought with it. He compares the effective 
utilities of all the things desired, and chooses the one whose 
effective utility is highest. If he spends one dollar for a con- 
cert, rather than add a new book to his library, it is because 
the effective utility of the concert is the higher. Next week 
he may do the same thing, and possibly the next after. But, 
if the concerts continue of about the same character, the 
time is likely to come before many weeks when the book will 
seem more attractive than another concert. In a similar way, 
he decides between a new tennis racket and a class pin, 
between a tally-ho ride and a game of base-ball which demands 
an admission fee. He buys the good chosen at the expense of 
the most highly desired good rejected. 

A man with a small income decides whether to spend five 
dollars for a ton of coal or two tickets to the grand opera. 
He buys the coal at the expense of an evening at the opera. 
A man with a larger salary, whose coal-cellar is already well 



UTILITY, VALUE, AND CONTRACTS 197 

filled, may haye to decide between the opera and a monthly 
banquet. The opera seems more attractive. These two 
expenditures of five dollars show that each spends his money 
for the one thing, of two or more, whose effective utility to 
him is highest, and also that the choices were made on 
different levels of want. 

Value corresponds to effective utility. When 
Between Value the word utility is used alone in these pages, it 

means absolute utility. Men arrange schedules 
of desirable things, as we have seen, according to their 
effective utilities. They value them in the same order. As a 
man values a thing will he put forth effort, or sacrifice other 
enjoyments, for it. Air and water are necessary to the con- 
tinuance of physical life. Their absolute utility is high. 
But, owing to the quantity of them usually available to man, 
even in cities, the value of the quantity used is low. Make 
them scarce, and their value rises. "All that a man hath will 
he give for his life," and for the means of life as well. 

Our final answer to the first question proposed is, therefore, 
as follows : A man first tries to obtain that good whose value 
to him is greatest, and he turns from pursuit of that when, by 
increasing the quantity in his possession, the value of it has 
been lowered below the value of some other good. 
The Formula ^^^m the poiut of viow, therefore, of any single 
for Value, persou, the factors outside of himself which 
determine his valuations of all things that seem desirable to 
him are expressed in this formula : 

-rx 1 . -, n , (1. Absolute utility. 

Value IS dependent upon i « q j.-. "^ 

Another statement of this truth which gives a correct 
impression about the number of goods that have utility com- 
pared with the number that have value is this : 

r 1. Those having little or no value because the 
Goods having! quantity is so great. 

utility: | 2. Those so limited in quantity that they 
have value. 



198 ELEMENTS OF ECONOMIC THEORY 

The substitution of a good with high absolute utility for 
one with low absolute utility, or the decrease of the quantity 
of a given good tends to increase the value of a unit of the 
good resulting. 

On the other hand, the substitution of a good with low 
absolute utility for a good with high absolute utility or the 
increase in the quantity of a given good tends to decrease the 
value of a unit of the good resulting. 

In other words, value varies directly with absolute utility, 
and indirectly with quantity. 
luustrations ^- ^^^^ ^^ ^^® followiug illustrations harmonize 
aaa Questions. ^[1]^^ the formula of value? 

a. A suit of clothes was new, and now it is old. 

b. A tree that has given only shade begins to bear 
fruit. 

c. A woman's hat, although "as good as new," 
goes out of style. 

d. A tool is made that enables a man to accomplish 
twice as much in a given time as with the one he 
has. 

e. The pneumatic tire competes with the solid rubber 
tire. 

/. A man was dependent upon his own wages, but 

inherits a fortune. 
g. A millionaire becomes bankrupt. 
h. While a man's income remains the same, the com- 
modities he can get with a dollar grow fewer. 
i. His income remaining the same, he can buy more 

commodities for each dollar. 
j. Automobiles become cheap in price and cost less to 
run than it costs to keep a horse. 
2. Mention some of the methods, not wholly under the 
control of a man himself, by which the per cent of his total 
income that he may spend for himself and family may be 
increased or diminished. Give similar examples of changes in 
what a dollar will buy. 



UTILITY, VALUE, AND CONTRACTS 199 

3. What things that have utility are also valuable? 

4. Suppose you represent a value level and a utility level, 
by two lines, and various things by the letters x and y^ thus: 

Value level— 1-1— yljl 



Utility leveL 



X X y y 



^ ^ y y 

Suppose, further, that there are below both levels material 
things {y y) that a man feels no want for. They have no 
want-satisfying quality to him. Explain how they may be 
brought above the level of utility {y'y') and then above the 
value level {y'^y"). 

5. Suppose other material things {x x) to exist above the 
value level of the same man. Explain how they may sink 
below the value level {x'x') and then below the utility level 
{x''x''). 

6. Give illustrations from common life for each of the 
above cases. 

a. Think of a tin can, when full of fruit and sealed, 
when used as a flower-pot, and when lying with 
other empty cans in the alley, for one case. Give 
another similar case. 

h. Might a sandpile, or a layer of stone under the 
soil, illustrate the first stage of the other case? 
Explain. 

7. For men in general, is there a continual rise and fall of 
materials past the utility and value levels? Why? 

Valuations in ^^i^ii ^ farmer voluntarily trades a horse with his 
Trade. neighbor for two cows, each gives that which to 
him is of less value for that which is of more value. At least, 
this is each man's opinion at the time. The farmer with his 
horse may have had his stock of working horses increased by 
"breaking in" a colt, so that one of the older horses could 
be spared without causing him much inconvenience; at 
the same time, his cows are not giving milk enough to 



200 ELEMENTS OF ECONOMIC THEORY 

supply his customers, and tie needs more cows. On the 
other hand, his neighbor has decided to reduce his pas- 
ture land and raise more corn, and needs another horse to 
make up a team for the plough. The effective utility, the 
value, of what A offers is, therefore, greater to B than the 
value of what he himself offers, and contrariwise. Both 
would have been gainers to "trade even." Did they trade 
even? For the sake of simplicity of illustration, we may sup- 
pose that the trade was between these two, and neither tried 
to see whether he could do better by trading with somebody 
else, or by selling for money and buying what he wanted with 
the proceeds, although both of these courses are usually consid- 
ered by actual traders. But shut up to each other, did the 
farmers trade even? If each valued the other's possession only 
a little higher than his own, it is likely they did. If each 
valued the other's possession much higher than his own, or if 
either did so, they may not have traded even. Suppose the 
man with the horse would really give his horse and ten dollars 
rather than not get the cows. If his neighbor is shrewd 
enough to detect this eagerness, he may get the horse and 
"boot" to the amount of one to ten dollars for his cows. If 
the man with the cows were the eager one, from one to ten 
dollars might have been paid the other way. In each of 
these cases, if nearly all the gain from the trade went to one 
man, it was possible for him to gain something more than 
ten dollars, for he would have been benefited to trade even; 
and the other gained something, in his own estimation, even 
though he paid ten dollars "boot," else he would not have 
traded. 

Suppose, now, that each man had been willing to give ten 
dollars rather than not trade. To trade even would be this 
ten dollars advantage to each man over not trading. If either 
concealed his eagerness and detected that of his neighbor, he 
might get, in addition, from one to ten dollars direct money 
payment from his neighbor. The total advantage to the 
shrewder man would now range between ten and twenty dol- 



UTILITY, VALUE, AND CONTRACTS 201 

lars, -while the advantage of the other would still be some- 
thing, as he preferred to give ten dollars rather than have the 
trade fail. 

It will be seen from this illustration that when two persons 
attempt an exchange, two valuations are made by each. 
First, each compares his own possession directly with the 
other's possession, and decides which is the more valuable to 
him. Second, each compares the two possessions from the 
point of view of the other, and tries to find out what the 
other's valuations are. By the direct valuations it is determined 
whether or not any trade at all can take place. If each values 
his own possession higher than that of the other, there can be 
no trade. If each values the other's possession higher than 
his own, a trade can take place. If both agree upon one pos- 
session as the more valuable, there can be no trade. If a 
trade is possible, the indirect valuations help to determine how 
the possible advantages from the trade shall be shared by the 
two men. 
Purchase in ^^ ^^^J ^^^ persons is moucy desirable for its 
aioney. q^^ sakc. Misers and coin collectors are 
exceptions. To most, money is desired as a means to the 
enjoyment of various forms of wealth and service. In a 
case, therefore, where one person is deliberating whether 
or not to buy that which another offers, the possible buyer 
has to decide by his direct valuation whether the special 
commodity offered is more valuable to him than some other 
commodity that the money will buy. The possible seller 
likewise decides whether the commodity he offers is more or 
less valuable to him than some other commodity which he can 
buy with the money to be received. 

When money is exchanged for some form of 
wealth or service, the amount of money is said 
to be the price of the wealth, or service. The amount of 
money the buyer is willing to pay rather than not receive the 
commodity is called the buyer's price. The amount of 
money the seller is willing to take rather than not part with 



202 ELEMENTS OF ECONOMIC THEORY 

the commodity is called the seller's price. The difference 
between the price actually received and the seller's price is 
what the seller gained by selling. The difference between the 
price actually paid and the buyer's price is what the buyer 
gained by buying. 

Suppositions ^^^ ^^® ^^^^ ^^ ^^® ^^^ farmers mentioned, we 
Made. assumcd that: (1) each was seeking his own 
advantage with all his might; (2) the conditions of the 
exchange were not affected by the opinions of others, or by 
possible trades with other persons; (3) each man was free to 
trade or not, as he chose. How far ai-e these suppositions 
true in actual life? 

To realize that cases exist where exchangers of 

Seeking One's , , , . , 

«vwn goods strive to the utmost to gain as much as pos- 

Advautage. ox 

Bible for themselves, you have only to remember 
the cases of "higgling over a penny" which you have seen, your 
own attempts to trade tops, Jackknives, marbles, etc., and the 
rush of all classes of people to supposed "bargain counters" 
and "sacrifice sales." On the other hand, your own experi- 
ence will doubtless be equally convincing respecting the exist- 
ence of exchangers who seek to give as much as possible in 
return for as little as possible. Mothers and fathers give lives 
of service to their children, expecting little in return; public 
spirited men and women give years of service to great causes, 
to the welfare of the community as a whole, and to the poor 
and unfortunate, with no thought of pay ; and boys and girls 
often give up some of the best of their toys and dainties to 
those who are less fortunate, accepting nothing in return, or, 
a£ most, only enough to make the other person feel that he 
has not received a gift outright. Many exchanges are made 
between friends, neighbors, and persons, one of whom, in 
some way, has an advantage over the other which he is unwill- 
ing to push to its utmost. Thus, it must be remembered, 
that bargains range all the way from those where each party 
seeks his own advantage with all his might, to those where 
one or both parties are trying to give the gi'eatest possible 



UTILITY, VALUE, AND CONTRACTS 203 

value for the smallest possible value. The typical case in 
economics, however, is where each seeks his own advantage. 
It may be interesting at this point to ask ourselves and each 
other how many cases we have known where one or both 
parties did not seek all he could get. 

1. Give cases known to you where persons who were seek- 
ing for a house paid more rent than was asked. 

3. Where less rent was taken than the house-seeker offered 
to pay. 

3. Give similar cases for : (a) wages ; (J) goods purchased 
in a store; (c) goods purchased of an acquaintance; (d) use 
of land for a building or for cultivation; (e) services of 
physicians, lawyers, teachers, nurses, etc. ; (/) fares upon the 
railway or upon a boat; (g) tickets to a concert or a theatre, 
or any entertainment. 

4. Give reasons for the unselfish action in each case. 

5. How do such cases compare in number with the con- 
tracts where each person tries to do the best he can for himself? 

6. What social acts of men can you think of that are not 
included in the following classification? 

Those performed under compulsion, com- 
pulsory. 

Those by which men make contracts with 
each other, contractual. 

Unselfish, altruistic. 

7. Give illustrations of each. 

8. Which group of acts more nearly coincides with the 
sphere of economics? 

9. In which group does much of the work of governments 
lie? Explain. 

10. How many of the groups must sociology study? Why? 

Possibly Crusoe and Friday sometimes traded 

External "^ 

Influences on as if they two wcre alone in the world, although 

the valuations which each made were even then 

determined somewhat by their previous associations with other 

^Pantaleoni, "Yale Review, " May, 1898, p. 95, 



Social human 
actions : ^ 



204 ELEMENTS OF ECONOMIC THEORY 

men. In the case of the two farmers cited above, it will be 
noted that the reason why one man wanted more cows was de- 
pendent upon the existence of his customers. In actual life it 
would also be impossible that their valuations of horses and cows 
should not be determined somewhat by the valuations of others 
in that vicinity. Where money is used to buy a commodity, the 
mere fact of the existence of money implies a large number of 
other persons who are willing to take it for goods of various 
kinds. It is the power to represent goods of all kinds for all 
classes of people that makes it money. Persons know in a 
general way, often precisely, just how much of a great variety 
of other goods they can get for the money they decide to give 
for the one they buy. Here, then, is a condition of bargain- 
ing that needs further investigation. How are general or 
market prices of goods determined? This is but another 
form of the second general question of this chapter. After 
the freedom of persons to contract as they choose has been 
discussed, this question will receive definite attention. 

All the legal restrictions upon freedom of con- 

L.imitation8 . n.-rw 

Upon Freedom tract mentioned and suggested m Part II should 

of Contract. 

be recalled here. Emphatic mention is also 
made of the fact that a person may freely choose to make a 
certain contract which gives unusual benefit to the other 
party, rather than make no contract at all, simply because he 
is ignorant of the values which men in general put upon the 
commodities exchanged, and also because he is so situated 
that no contract means great loss, suffering, sometimes even 
death, to him and those dependent on him. Instances of the 
former are numerous among uncivilized people who accept a few 
trinkets and gewgaws in return for rare furs, ivory, precious 
stones, etc. Forced sales of real estate, houses, furniture, 
etc., and the wage contract of persons who must sell their 
services to-day or starve to-morrow are sadly familiar examples 
of the latter. Ignorance of the values men in general pnt 
upon the commodities to be exchanged, and inability to with- 
hold one's commodity from exchange so long as the other 



UTILITY, VALUE, AND CONTRACTS 



205 



party can withhold his, make a real freedom of choice in con- 
tracting impossible. 

It remains to show how the value schedules of a 

How Social or , » i i i i i 

fliarket Price is large numocr of persons — each value scneauie 

Determiuied. ,., ,, n, «j ■, ^ l 

being dependent upon the two factors, absolute 
utility and quantity of each commodity already in the pos- 
session of the maker of the schedule — tend to determine a 
social or market price for each commodity, not monopolized, 
which is generally bought and sold. Suppose, for example, 
that ten men come together in a certain place, on a certain 
day, and that each has a horse to sell at not less than the 
following prices : 



A 


will sell at $150.00 


B 




' 145.00 


C 




' 140.00 


D 




* 135.00 


E 




' 130.00 


F 




' 125.00 


G 




' 120.00 


H 




' 115.00 


I 




' 110.00 


J 




' 105.00 



Suppose, also, that there were present at the same time and 
place ten possible buyers of horses who will pay not more than 
the following prices : 

M will pay $102.00 



N 




' 107.00 







' 112.00 


P 




' 117.00 


Q 




* 122.00 


K 




' 127.00 


S 




' 132.00 


T 




' 137.00 


U 




' 142.00 


V 




' 147.00 



206 ELEMENTS OF ECONOMIC THEORY 

If there were practically no difference in the horses (an 
assumption that would hold true in the case of stocks, cereals, 
and manufactured goods of staple grades and varieties), one of 
the following courses would probably be pursued: either those 
who were most eager to sell and those most eager to buy 
would first find each other out and 

V would buy of J 
U •' "I 

T *' " H 

S *' " G 

K " '' F 

leaving the sixth man, Q, who offers only $122, unable to buy 
of E, who asks $130; or, by what is termed the "higgling of 
the market," it would soon be found out that a certain price 
would make the actual buyers and sellers equal in number, 
and all the trades possible would be made at that price. In 
the latter case, if horses were sold at above $127, there would 
be only four persons ready to buy, and at least five ready to 
sell; and if the price were put below $125, there would be 
only four sellers and at least five buyers ; but, if somewhere 
between $125 and $127, there would be five buyers and five 
sellers, the same number as in the first case. By this last 
method of determining market price, the report would be that 
horses sold at, say, $126, surely at a figure between $125 and 
$127, By the fii'st method, also, if each pair of traders suc- 
ceeded in dividing the advantage of their trade evenly between 
them, each trade would take place at $126. For example, 
V, who buys of J, and would have paid $147, gains $21 by 
buying at $126, and J, who would have sold at $105, gains an 
equal amount by selling at $126. So, likewise, with each pair 
in turn, and when we come to R, who will pay only $127, and 
F, who will not sell for less than $125, there is only a possible 
two dollars to gain by the trade, even if it all goes to one 
man. Therefore, by the first method of trading, as well as by 
the second, the last trade must have been between $125 and 



UTILITY, VALUE, AND CONTRACTS 207 

$127. Some political economists call R a marginal buyer and 
F a marginal seller, one being very near the point of refusing 
to buy, and the other almost ready to refuse to sell. It will 
be found that market price always lies between the very 
narrow limits of marginal buyers' prices and marginal sellers' 
prices. 

ExEECiSES — ■!. Try to make a diagram of the buyers and 
sellers of horses used as an illustration on page 205, which 
will show in graphic form : 

a. All the successful buyers' prices. 

1. All the successful sellers' prices. 

c. All the unsuccessful buyers' prices. 

d. All the unsuccessful sellers' prices. 

6. How much each successful buyer and seller gains if all 
horses sold at $126. 

/. How much each man who failed to sell or buy would 
have lost by buying or selling at $126. 

2. Assign a different series of sellers' prices from those 
given, leaving the buyers' prices as they are, and find out the 
market price that would be established. 

3. Change the buyers' prices, leaving the "sellers' prices as 
they are, and find out the market price that would be 
established. 

4. Change both sets of prices and work out the market 
price established under those conditions. 

The intending buyers who would not pay so much and the 
intending sellers who would not sell so low would be com- 
pelled to wait for another day, one group waiting for a higher 
price and the other group waiting for a lower price. 

Thus it is seen that a meeting of persons wishing to buy at 
various prices, with other persons wishing to sell at various 
prices, would tend, on the first day of meeting, to establish a 
social or market price, at which the greatest possible number 
of sales could take place. If the meeting of intending buyers 
and sellers of horses should continue on succeeding days, the 
presence of a large number of men willing to sell at, or below, 



208 ELEMENTS OF ECONOMIC THEORY 

the market price of the day before, and the presence of only a 
small number of men willing to pay as high as that market 
price, would tend to lower the first day's market price. On 
the other hand, the presence of a large number of men ready 
to pay higher, and of a small number of men ready to sell 
so low, would tend to raise the first day's market price. 

A formal answer to the second question asked on page 193 
may now be given. Individuals arrange value schedules based 
upon the absolute utilities of commodities and the amounts of 
them already available for the satisfaction of their wants. So 
far as the different commodities of these schedules are 
definitely compared with each other, the comparison is made 
in money, that is, they are given different prices. Groups of 
possible buyers of one commodity, with their different buyers' 
prices, are in daily contact with groups of possible sellers, 
with their different sellers' prices. A market price results, 
which, in general, allows the maximum number of sales. 
Whenever new buyers or new sellers, in relatively great num- 
bers, appear with new buyers' and sellers' prices, or the old 
buyers and sellers materially change their prices, a new mar- 
ket price may be formed, which may later, in its turn, give 
way to another market price. The social or market prices of 
different commodities determine the amount of one com- 
modity that may be exchanged for a definite amount of 
another commodity in a certain market at a certain time. 
Different Com- ^^^ ^'^^^ ^^ ^^® market which withiu certain 
""^Differe^^^* ^^^^^^ "fixes the market price" of retail groceries, 
Markets. fruits, etc, may be only a few stores with the 
people who trade in them. Sometimes one retail store with 
its customers forms such a market. On the other hand, the 
market for wheat is composed of buyers and sellers in the 
whole civilized world, and they are kept in electric touch 
with each other by means of the telegraph and cable. So 
sensitive is this market to the influence of the quantity factor 
in the valuation of persons, that an abundant rain, after a 
drouth in a great wheat raising region, lowers the prices mar- 



UTILITY, VALUE, AND CONTRACTS 209 

ginal buyers will offer for wheat to be delivered about the time 
the crop affected by the rain can be marketed. These lowered 
buyers' prices may lower the market price of wheat all over 
the world. 

Demand ^^ ^^ commouly Said that the market price of 

and Supply, anything depends upon demand and supply. 
These words are indeed convenient names for very complex 
groups of conditions and forces on each side of any given con- 
tract. The danger is that we shall come to use these words 
with a show of knowledge when we are in reality profoundly 
ignorant about the facts behind either of them. For example, 
demand and supply might be said to have fixed the market 
price of horses in the illustration we have used, but what was 
really present on each side was a group of active-minded men, 
about each of whom we know very little. Suppose those who 
had horses to sell are represented on the supply side of the 
following diagram, and that, in general, an increase of 
pressure — supply — on this side tends to lower the market 
price of horses. 

Suppose, also, that intending buyers are placed on the 
demand side, and increase here tends to raise the market price 
of horses. 

In this case, supply is furnished by ten men, who have 
various degrees of eagerness to dispose of their horses. The 
eagerness of each man to sell, or his valuation of his horse in 
terms of money, is dependent upon the absolute utility of 
horses to him and the number of them already at his disposal. 

On the demand side, are ten other men whose valuations 
have been made up in a similar way. 

Now, anything that changes the horse valuation of any one 
of these twenty men, especially the ones whom we have called 
marginal, tends to change the social valuation or market 
price of horses, — market price being social valuation expressed 
in money. But the cause for any one person's valuation 
comes, as we have seen, through a change in its absolute 
utility to him or through a change of quantity. Therefore, it 



210 



ELEMENTS OF ECONOMIC THEORY 



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UTILITY, VALUE, AND CONTRACTS 211 

is evident that anything which changes either one of these 
factors in the valuation of one or more men on the supply 
side, or the demand side, tends to change the market price. 

Furthermore, the causes for any person's valuation may be 
individual, such as affect him alone ; or social, such as affect 
many, perhaps all, at the same time. 

Demand and supply, then, are, by themselves, of little real 
use in explaining why the market price of horses, or of any- 
thing else, goes up or down. To say that the market price of 
anything is dependent upon demand and supply is no more an 
explanation of changes in price than the statement that the 
mercury of a thermometer is dependent upon heat and cold is 
an explanation of the temperature of a given place. True, 
the mercury does go up and down with variations in 
temperature, but the causes of change in the temperature at a 
given place lie back of the mere words heat and cold, among 
the complex phenomena of radiation, direction of the wind, 
degree of moisture of the atmosphere, etc. So the real forces 
in determining market price are back of the mere words 
demand and supply, among the complex conditions and causes 
that are affecting the valuations of one or more individuals. 
These words are easily used, but to trace the forces back of 
demand and supply, to their sources, is the work of trained 
men and women. 

An attempt to answer the following questions may aid some 
to see the truth of these statements a little more clearly : 

1. In respect to the market price of horses in the illustra- 
tion given, think out some change in market price on the day 
described which might have resulted from a change in one 
man's valuation. 

2. Think out some change in the utility of horses to him, 
or in the number of them already possessed by him, which 
might have caused this difference in his valuation. This 
may be called an individual cause for change in market price. 

3. Think out similarly some social causes which might 
have m9,de the market price much different from what it was. 



. 212 ELEMENTS OF ECONOMIC THEORY 

4. Think of all the buyers of horses in your section of the 
country as taking the places of the ten buyers in the illustra- 
tion, and of all the sellers of horses, the places of the ten sellers. 
What would be the tendency of each of the following causes 
upon the market price of horses? State also, for each cause, 
whether it is individual or social. 

a. Good bicycles fall in price from one hundred 
dollars to thirty-five dollars. Give reasons. 

l. Suppose people who "are somebody" give it out 
that only those who own an automobile can go in 
their "set." Give reasons. 

c. The belief becomes general that bicycle riding is 
unhealthful. Explain. 

d. A horse breeder dies, and his horses are sold at 
auction. Explain. 

e. A horse epidemic breaks out which carries away 
half the horses. Explain. 

f. A tax of ten dollars is levied on every horse in the 
country. Explain. 

g. War breaks out, and the government buys 10,000 
horses for the army. Explain. 

li. A great railway is to be built, and the contractors 
buy up 10,000 mules. 

i. A dozen rich men fall ill, and their doctors pre- 
scribe daily horseback riding. 

5. Show that the diagram may be so modified as to illustrate 
the directions from which influences stream in that tend to 
raise and lower the market price of wheat, corn, gold and 
silver bullion, any form of wealth. Are there mai-ginal buyers 
and sellers in each of these cases? 

6. Show that it may be so modified as to illustrate similarly 
for the wages of carpenters, servant girls, or payment of any 
kind of service that is regularly sold. 

7. Is the diagram given, where only twenty men are sup- 
posed to be concerned, more or less simple than a diagram for 
wheat? for gold and silver? for wages? Why? 



UTILITY, VALUE, ANlD CONTRACTS 213 

8. Does the fact that you see the directions from which 
influences come to raise and lower market price give you full 
information about the number and force of these influences? 
Why? 

9. The market price of labor is high in America. Is this 
fact fully explained when it is said demand and supply make 
it so? Why? 

10. Mention some causes which men give for high wages. 
Are these the only causes? Do any of these assigned causes con- 
flict? Which is right? Do you understand the whole matter? 

11. A given weight of gold will buy much more silver now, 
the world over, than twenty years ago. Is it enough to say 
that demand and supply have caused this? Why? 

12. Show that the utility of these metals as money is increased 
and decreased for individuals by the action of governments. 

13. If, in some way, any article comes to serve additional 
wants for people in general, how would these persons tend to 
value the article? Explain. 

14. Would the reverse be true? Explain. 

15. Show that society, through legislation, can make so 
many individuals change their valuations of a commodity as 
to change its market value or price. Give examples. 

16. Show that society, through fashion, can do the same 
thing. Give examples. 

17. Show that monopolists of all sorts, men who "corner 
the market," and others who in any way control the quantity 
of a commodity, can so change the quantity of it accessible to 
individuals that their valuations of it are raised or lowered, 
within limits, at the will of the monopolists. 

18. Make out a list of the commodities used in your family 
the quantity of which is supposed to be monopolized. 

19. What bearing does the fact of a monopoly have upon 
the method described above, of determining market price? 

20. If a commodity is fully monopolized, so that the quan- 
tity of it accessible to the public is perfectly controlled, how 
high a price can the public be made to pay for it? Explain. 



214 ELEMENTS OF ECONOMIC THEORY 

21. Ask the above question about different specific com- 
modities, as gas, city water, fare on street railways, beef, 
pianos, services of a doctor, boots and shoes, land, etc. 

22. What alternative do the people have if the market price 
is put higher and higher? What might happen if all articles 
of food were monopolized? 

23. If you were a monopolist, in absolute control of a com- 
modity, and wished to "make" as much as possible out of it, 
show that it might be best for you to keep the price low. 

24. Criticize this formula for such a purpose : 
X = cost of one unit of commodity. 

y = selling price or market price of one unit of com- 
modity, 
n = number sold, 
(y — x)n = maximum. 
If the difference between y and x is very small, as it would 
be if the selling price were low, how can (y — x)n be greater 
than (y-x)n when the difference between y and x is great? 
Give example of this. 

25. Which are of more effect in causing changes in market 
price — social causes or individual causes? Why? 

26. Give several examples from industrial history of great 
changes in the market price. What were some of the causes 
in each case? 

27. Why do men disagree as to the effect of tariffs on 
wages and prices in the United States? Are you ready to set 
them right? Why? 

28. Why do men disagree as to the causes of the fall in 
market prices of silver in the past twenty years? Are you 
ready to set them right? Are you satisfied merely to say that 
demand and supply have caused these falling prices? Why? 

The fundamental importance of this necessarily 
canceofxhis somcwhat technical discussion of utility, value, 

price, and contracts, appears when it is remem- 
bered that in the civilized world of to-day, as never before, 
men are satisfying their wants by producing utilities of service 



UTILITY, VALUE, AND CONTRACTS ?15 

and wealth for other people, in return for which they must 
receive, if they are to get them at all, the services and wealth 
which are to satisfy their own wants. 

Its importance should stand out in still clearer relief when 
it is further remembered that all these exchanges are now 
made less at customary and traditional rates and more by 
contracts which are subject only to the economic forces acting 
at the time upon the two contracting parties than has been 
true in past centuries. Upon the valuations of the two parties 
to the contract and upon the resultants of many similar valua- 
tions as expressed in market prices, depend in general all con- 
tracts between wage-worker and employer for wages, between 
borrower and lender for interest, between tenant and landlord 
for rent, and between buyer and seller for purchase price. 
Upon one side or the other of one or more of these contracts 
every adult person continually finds himself. Upon the issue 
of his contracts depend, to a great degree, his own economic 
welfare and that of those dependent upon him. All indus- 
trial struggles center about the two elements of value — ^utility 
and quantity of the commodity concerned. Any person or 
combination of persons that can better the quality of a com- 
modity or decrease the quantity of it accessible to others tends 
thereby to increase its value to others. From this point of 
view, trade unions, trusts, monopolies, legislation, strikes, 
etc., may be profitably studied. 



^16 ELEMENTS OF ECONOMIC THEORY 



Chapter II 



PKODUCTIOH 



Man and His ""^^^ ^^ ^^^ home on the outside of a huge 
Home. \)a\l, rotating, revolving, and careering through 
infinite space, accompanied by its companion spheres. From 
the surface of this ball, from a relatively thin layer of air 
about it, from a few holes dug a little way below the surface, 
from the fish he takes from its waters, and from the various 
forms of energy which stream toward him from out the infinite 
star-depths, must come whatever is to minister to his wants 
through the medium of his senses. Whatever earth and the 
universe of suns besides contribute of wild fruits, shelter of 
forests, ozone of atmosphere, inspiration of cloud, and warmth 
of sunlight is so much utility furnished him gratuitously. 
All other satisfactions of want which he is to obtain must be 
secured through his own modification of his environment, or 
by a modification of himself. Only the blindness of man kept 
him for unknown ages ignorant of the fact that the seemingly 
barren surface of the earth and the empty space about him were 
stored with possibilities of food, clothing, shelter, and motion 
for his use so soon as he should open his eyes to their 
presence. 

Slowly has he learned how to make for himself tools, with 
which to strike down at a distance animals suitable for food, 
and with which also to protect himself against men and 
other animals. Some unknown Prometheus among men 
taught him the utility of fire. With what ignorance of chem- 
istry and the laws of life and growth has he scratched the 
surface of the earth and scattered seed for scanty harvests ! 
How painfully and slowly has he, through all the ages until 
our own, crawled from place to place on foot, or mounted on 



PRODUCTION ai7 

some beast scarcely stronger than himself ! All that man has 
wrought in developing the quality and infinite variety of his 
articles of food, di-ess, and shelter; all the services that he 
has learned how to perform ; all the knowledge he has gained 
about his environment, himself, his origin, and his probable 
destiny, all these achievements and more are included in the 
complete story of man's efforts to satisfy his wants directly 
from nature, or by some modification of the materials and 
endowment furnished him by nature. From the objective 
and economic points of view, all that man has achieved, 
from the age when he wielded only rude stone implements 
and lived, soul and body, in caves, to the present moment, 
when he, like Jove, makes the universe his home and 
literally holds the thunderbolt in his hand, has been done by 
him to satisfy the impulses and cravings of his own developing 
nature — to produce actual or potential utility. 

The primary elements in satisfaction of want are man and 
his natural environment, man and that-which-is-not-man. 
To produce, in an economic sense, is so to modify environ- 
ment by human effort as to make it more satisfactory to man. 

Formulae of ^^^ ^®^™^ natural rcsourccs will be used here as 

Production, ^j^q equivalent of environment and it must be 
remembered that both materials and forces are included. 
Many writers also use the word land in this broad sense. 
Some important differences in the conditions of produc- 
tion may be shown by modifications of the equation given 
in Part I. 

1. Man + natural resources = utility. Expressed entirely 
in words this equation might read as follows: man uses 
natural resources to satisfy his want. This is the simplest 
possible form of production. Man has always used the sun- 
light to give himself warmth, and wild fruits to satisfy his 
hunger. A case where man puts forth more effort than in 
the above acts would be that of a savage who scales a cliff, or 
climbs a tree, for the eggs and young of birds. Still, the most 
difficult forms of production, according to this formula, are 



218 ELEMENTS OF ECONOMIC THEORY 

little more than mere appropriation of nature's bounties. 
Even the most primitive races of men do not, as a rule, satisfy 
their wants so directly. Sticks of special forms and stones of 
certain shapes with which to strike down animals, two stones, 
one hollowed and one rounded, for crushing grain, a bow and 
arrows with which to strike a blow at a distance, snares for 
unwary birds, and thongs of rawhide and ropes of twisted 
grasses with which to subdue and harness animals, are familiar 
illustrations of articles which even primitive man has fash- 
ioned from the materials furnished by nature, not because 
these articles of themselves satisfied his wants, but because 
by their aid he could procure more food, clothing, shelter, 
means of adornment, and culture. All goods desired for the 
immediate satisfaction of want, we may call consumption goods, 
or goods of the fii'st order. ^ The goods desired because, by their 
aid, more consumption goods can be obtained, may be called 
goods of the second order. Goods desired because, by their 
aid, goods of the second order may be secured, may be called 
goods of the third order, and so on. Man has combined his 
own efforts with natural resources to produce tools and 
machinery, machines to make machines, and still other 
machines to make machine-making machinery, in order that, 
by the aid of different forms of this third and derivative factor 
in production, commonly called capital, he might use his 
energies upon natural resources to better effect, in the produc- 
tion of consumption goods. From the sharpened stick to the 
steam-driven gang plough, from the distaff to the modern 
factory, from the canoe and the two-wheeled ox-cart to the 
modern steamship and the transcontinental railway, man has 
invented, discovered, developed, and accumulated tools, 
machinery, buildings, appliances, chemical formulae, and 
libraries of human experience, that he might wield all these 
things as instruments in his assaults upon nature for a greater 
variety and quantity of consumption goods. 

^Marshall, Principles of Economics, vol I, p. 115. 



PRODUCTION 219 

For most of the production in the world since man became 
man, the following formula must, therefore, be substituted for 
the first : 

2. Man + capital + natural resources = utility. Man uses 
capital to help him to modify nature so as to satisfy his wants. 

But even this formula needs further modification in order 
to express the whole truth. An isolated man, like Crusoe 
before Friday came, might satisfy his wants according to this 
formula. A man in a civilized land, or anywhere in a com- 
munity of his fellows, can rarely do so. Even among savages 
there are fairly well defined usages in accordance with which 
men hunt, wage war, pasture flocks, and reap scanty harvests 
of grain. In England and the United States, as we have 
already seen, some of the social conditions which have regu- 
lated the productive activities of men have been variously 
formulated by kings, lords, gilds, parliaments, congresses, 
voluntary agreements of many sorts, and even international 
treaties. Man is a social animal, and can not live to himself 
if he would. Groups of men, through usage, custom, public 
opinion, ethical ideals, and law, have always had a great 
influence over individual industries. In short, society has 
always devised some form of control and compulsion of the 
individual who tries to make his will the supreme law. A third 
formula is, therefore, necessary. 

3. Society + man + capital + natural resources = utility. 
In subordination to the usages, customs, and laws of the 
country in which he lives, man uses ^capital to help him to 
modify nature so as to satisfy his wants. 

Mention has been made, in Part II, of some of the political 
changes that have taken place in the social regulations of 
production in England and the United States. Many of these 
regulations have not proved permanent. Unless the opinions 
of American voters remain the same from year to year, these 
regulations may change annually in some of our states. 
Taking the country as a whole, they will, without a doubt, 
become in a decade greatly different from what they are now. 



220 ELEMENTS OF ECONOMIC THEORY 

sne estive ^- ^^^^ some of the most important bills now 
Questions, ppoposed and laws akeady enacted in your state 

which have directly to do with the ways by which individuals 

get a living. 

2. What restrictions do they place upon individuals? Why? 

3. What special privileges do they give natural and legal 
persons which make it easier for them to get a living? Why? 

4. In case special privileges are given, is it supposed that 
the persons to whom they are given will perform for society, 
in return, certain services, or produce certain utilities? How 
is this side of the contract kept? Why? Is the contract a 
fair one to both sides? How do you know? 

5. Look up some of the recent national laws and decisions 
of the United States ^Supreme Court ^ which bear directly 
upon the methods by which persons are getting a living. Are 
any of them of much importance to you? Why? 

Variation in ^^ ^® ^^^^ ^^ ^^^^ formula, society + man + 
*Qu^«t*of* capital + natural resources = utility, as an 
utilities. equation, it is evident at once that changes in 
any one, or more, of the four factors in the first member of the 
equation must tend to produce similar changes in the second 
member. In general it may be said that utilities are increased 
in number and improved in quality by one or more of the 
following causes: by wiser and more justly administered social 
regulations; by everything that improves the physique, adds 
to the mental equipment, raises the moral standards, and 
enlists more completely the productive energies of man ; by 
every substitution of a more efficient for a less efficient form 
of capital ; and by the discovery and appropriation of richer 
and more varied natural resources. An intelligent comparison 
of one period of the world with another, or a comparison of 
one period of a single country with another period, in all these 
particulars, would not fail to reveal much concerning the 

'Stimson. Read also Kelley, The United States Supreme Court 
and the Utah Eight - Hour Law— "The American Journal of Soci- 
ology," July, 1898. 



PRODUCTION 221 

relative quantities of goods enjoyed by the people of the two 
periods. Compared in this way, the economic superiority of 
the England of to-day over the England of Norman times, 
and the superiority of the United States of the present 
time over the thirteen colonies, is quickly apparent. The 
facts given in Part II afford a partial basis for such com- 
parisons. 

[Note. — It will be seen later that, on account of the great 
difference between utility and value, the statement, suggested 
above, that the people of a single business or nation will be 
economically well off provided they succeed in producing a 
gi-eat quantity of utilities, needs modification. While literally 
true for the world, it is not necessarily true for a nation and 
still less so for a single business. So far as any business 
or nation disposes of a surplus of its products for other products, 
it wants as great a value as possible, not merely an abundance 
of utility. 

Of course, the only actor in all production is man — ^man as 
grouped in all sorts of ways and called in our formula society ; 
man as undertaker and directed worker of each special busi- 
ness; man as an owner of capital; man as an owner of 
natural resources. Now, it makes a great deal of difference 
to men what results they expect from their efforts. There- 
fore, the energies of men, their courage, perseverance, hon- 
esty, and even their physical strength, considered as producers, 
depend, to a great degree, upon the size of their share in the 
product of industry — in other words, upon what pay they get 
for their various efforts. It is this problem of sharing the 
product which is called by economic writers "distribution." 
To a discussion of distribution, a separate chapter will be given, 
but mention is made of it here in order to suggest the fact 
that no one can fully discuss or understand how the produc- 
tion of utilities increases and diminishes without taking into 
account also the facts of their division among the producers — 
distribution. These two processes continually react one upon 
the other.] 



222 



ELEMENTS OF ECONOMIC THEORY 



From the economic point of view, a fundamentally desirable 
result is an increasing per capita production of consumption 
goods for the world, for each country, and usually for each 
business. 

Suggestive ^' Compare China with the United States, with 
Questions. ^ vicw to arriving at some conclusion as to the 
per capita production of utilities in the two countries. A 
diagram similar to the following may be used : 



CONDITIONS AND 

FACTOES AFFECTING 

PRODUCTION. 


UNITED STATES. 


cmNA. 


RESULTS UPON 
THE UTILITIES 
PRODUCED ARE 
IN FAVOR OF: 


Usages, customs, 
and laws of society, 
which affect pro- 
duction of utility. 








Physique, intelli- 
gence, moral stand- 
ards, energy, cour- 
age, skill, etc., of 
man as a producer. 








Variety and eflS- 
ciency of various 
forms of capital. 








Variety, abun- 
dance, and distri- 
bution of natural 
resources. 









Fill all these spaces with the best facts you can choose, and, in 
the last column, state the result of each comparison as being, in 
your opinion, favorable to China or to the United States. 

When the diagram is as complete as you can make it, study 
the last column, and try to come to a conclusion as to which 
country, on the whole, can produce more consumption goods 
per person. 



PRODUCTION 223 

a. Did you have any difficulty in filling in the dia- 
gram? Why? 
l. Could you fill it out better after you had studied 
the facts about these two countries for a longer 
time? 
c. Do some of your results in the last column seem 
favorable to one country and some to the other? 
Can you come to any final conclusion as to the 
comparative productivity of the two countries 
without knowing how much one country has 
the advantage of the other in the various par- 
ticulars? Why? Would it take hard study 
to answer accurately the question of how much 
advantage either possesses? Is it worth an at- 
tempt? 
3. Try to make a similar diagram, {a) to compare the United 
States of to-day with the American colonies, (Z>) to compare 
the United States with England, (c) with Germany, (fZ) with 
America at the time of Columbus. 

3. Give illustrations of capital in the form of tools and 
machinery which have been thrown aside for more efficient 
capital. 

4. What is likely to be the fate of the steam locomotive? 
Why? 

5. Give some illustration of a business that has failed 
because its competitors used better tools and machinery. 

6. Give illustrations of businesses which have failed through 
the fault of the undertakers. 

7. Name enterprises that have been given up because the 
particular natural resource needed gave out. 

8. Name enterprises which have been started when a 
natural resource was found in a new field. 

9. Give illustrations of the effects of inventions upon the 
production of several articles. 

10. Show the effect of some of the discoveries in chemistry 
upon production, 



224 ELEMENTS OF ECONOMIC THEORY 

11. Give similar illustraticns for physics, geology, biology, 
physiology, meteorology. 

13. Suppose two machines, one very simple and the other 
complex and heavy, produce in a given time the same amount 
of consumption goods ; which, other things being equal, is the 
better machine? Why? Give examples of this. 

13. Suppose men could have gotten the same amount of 
consumption goods with one hundredth part of the tools and 
machinery they now use; would they have had all this 
machinery? Why? 

14. Is an abundance of capital in the form of railroads, 
manufactories, machinery, etc., a sure sign that the people are 
having their wants well supplied? Why? 

15. Give illustrations of natural resources which have been 
withdrawn from use in production because the owner was not 
satisfied with the return — his share in distribution. 

16. Give similar cases for capital. 

17. Give cases of men who have been inefficient in produc- 
tion because of failure to get what seemed to them a sufficient 
reward for their efforts. Why, under such circumstances, do 
thej not give up trying to produce at all? 

18. Show that society sometimes withdraws its cooperation 
from a business enterprise because it does not get a sufficient 
share of the product. 

19. Give illustrations which are as nearly opposite those 
given in answers 15-18 .is possible. 

20. What do you think of the business ability of a man 
who keeps a pair of horses thin and weak from lack of food, 
in order to save in his bill for feed? Why? 

21. What do you think of a society that treats any of its 
human producers in a similar way? 

22. How can it be avoided? Is the question a simple one? 



SHARING THE PRODUCT 235 



Chaptee III 

SHAEING THE PEODUCT — DISTEIBUTION" 

Taxes, Profits, In the equation, society + man + capital + 
Kent. Interest, natural resouices = utility, it might be thought 
at first that man appears but once. The truth is, however, as 
we have just seen, that he is concerned with every factor of 
each member of the equation. It is man's want or impulse 
to act which sets the whole process of production in motion. 
There could be no such thing as a utility, a want -satisfying 
quality, without some one to feel the want. Furthermore, 
man is the only actor in the productive process. He and his 
fellows make up society, he puts forth his individual energies, 
he possesses rights of property over natural resources and cap- 
ital. Therefore, the problem of distribution seeks an answer 
to the question : How is it determined what amount of all that 
is produced shall go to men as social beings, as they exercise the 
functions of the society factor in production ; what amount to 
men as owners of the natural resources used ; what amount to 
men as owners of the capital required ; and what amount to the 
men actually engaged with hand and brain in the productive 
process? The common names of these respective shares are as 
follows: society receives taxes; owners of natural resources, 
rent; owners of capital, interest; man as the independent 
manager of the business, profits ; and man as a subordinate 
worker, wages. 

World Income "^^^ *<^^^^ amouut of goods produccd in the 

^income^OT*^ world during a year may be called the world's 

Dividend. income, or dividend, for the year. In a similar 

way, there is a national dividend for each nation and a separate 



226 ELEMENTS OF ECONOMIC THEORY 

dividend for each business enterprise, whether that of a man 
working alone, or that of a corporation. Taking one year 
with another, it is evident that private persons, corporations, 
nations, and the world must be restricted in the satisfaction of 
their wants by the amounts of goods produced, by their various 
annual dividends. 

In Part I, page 44, this dividend or income of the world was 
referred to as a stream from which all persons take for their 
own consumption, and to which they return the goods which 
they themselves produce. It is from this stream of goods, 
then, that the various shares in distribution may be thought 
of as being taken. 

Taxes seem a grievous burden to most people, 
but, rightly viewed, justly laid, economically 
collected, honestly and wisely expended, they would appear 
as that part of a national, state, or municipal dividend 
which satisfies man's want better when socially consumed 
than when individually consumed. In the United States, 
the national dividend, and consequently the incomes of men, 
are subject to the levies of such a large number of taxing 
bodies, acting so little in harmony, and with so little thor- 
ough knowledge of the effect of their actions upon the 
persons taxed, that the whole system, or lack of it, is in a 
chaotic state. 

Suggestive 1. Ask your father, or some owner of real estate, 

Qaestions and « i . i -n 

Exerctses. for One of his tax bills. 

a. How many kinds of taxes are mentioned on the 
bill? What are they? 

b. Ask the one from whom you get the bill 
whether or not he makes any other compulsory 
payments for public purposes. If so, what are 
they? 

c. Compute his regular yearly compulsory payments 
for public purposes, and divide the sum by the 
market price of the property upon which the pay- 



SHARING THE PRODUCT 227 

ments are levied. What is the result for each 
dollar of such property? 

d. Divide the total tax for each purpose by the total 
property on which it was levied. What are the 
results for each dollar of such property? 

e. Arrange these results for each dollar of property 
(per cents) in a column, from greatest to lowest. 

/. Do you know who determined what these per cents 
should be, how the property was valued or 
"assessed," who collected the taxes, what was 
done with the money, how accounts for it are 
rendered, etc.? 

g. Are these things worth inquiring about? 

2. Select one or more of the different kinds of tax found 
as above, and ask : 

a. Who ordered this particular tax collected? 

b. Who assessed the property on which it was levied, 
and by whose order? 

c. Who sets a legal limit to the per cent of this par- 
ticular tax that can be levied? 

d. Who made out the tax bill? 

e. Who collected the tax? 

/. Who took the tax for safe keeping? 
g. Upon whose order was the tax expended? 
Ji. Who made a report to the tax payer to tell him 
what had been done with his money? 

3. The following exercise ^ is also suggested, either for the 
class or for one or two students who can give it special time. 



*A modification of a plan in use by Professor Frederick R. Clow, of 
Oshkosh, Wisconsin. See The Study of Municipal Finances — 
"Quarterly Journal of Economics," vol. X, 



238 



ELEMENTS OF ECONOMIC THEORY 



Schedule of Ordinary and Extraordinary Receipts and 
Expenditures of Some Political Society — Village, Town, 
City, County, or State — for One Year. 



General 
Functions 


Functions of the Political Society 
in More Detail. 


Expenditures. 


Receipts. 


Political 
Society 
Studied. 


Ordi- 
nary. 


Extra- 
ordi- 
nary. 


Ordi- 
nary. 


Extra- 
ordi- 
nary. 




Legislative Dej^artment 










Maintenance 


General Executive Department 










of its 


Legal Department 










Government, 


Financial Department 










Keeping 


Elections 










Up its 


Other Such Purposes 










Machinery. 


Totals 












Criminals 












Poor 










Care of 


Defective 










Dependents. 


Sick 












Other Similar Persons 












Totals 
























Courts 












Police 












Militia 












Fire-protection 












Inspection of Foods, Buildings, etc. 












Regulation of Dangerous Pursuits . . 












Sanitary Measures 
























Totals 























Bridges 












Streets 












Parks 










Public 


Lighting and Care of Above 










Convenience. 


Sewers 












Removing Garbage 












Other Similar Fimctions 












Totals 
























Schools 












Libraries 










Culture 


Museums 










Information 


Public Celebrations 










Documents 










Functions. 


Moniunents, etc 












Totals 
























Water Works 










" Quasi- 


lias and Electric Light 










Private " 


Street Railways 










Business 


Markets, Wharves, Ferries, etc 










Enterprises 


Cemeteries, etc 












Totals 


































Other 




































Totals. 
























Balances. 

























SHARING THE PRODUCT 229 

4. Try to imagine the condition of the people in the polit- 
ical society studied if all the functions as above mentioned 
should be suddenly stopped. 

5. Are taxes an unmixed evil? Why? 

6. Why do people so often think taxation a sort of legal 
robbery? 

Man, in his role of manager, is, in one sense, 

Profits. , ' . . . „ 

the most important person m a given case of 
production. While society can not be avoided, and man as 
owner of natural resources, of capital, and of productive 
energy is necessary to the success of any business, still, man as 
manager, director, or undertaker, interprets his own wants, 
and sets about satisfying them in a certain order, if he is a 
self-sufficing producer ; and, if he is not a self-sufficing pro- 
ducer, he interprets the wants of other men, and sets in 
motion various productive processes, in order that he may 
have in his possession goods that his fellows value highly 
enough to be willing to give him satisfactory amounts of 
other goods in exchange for them. If he misjudges the 
valuations of society, and produces something which can 
not be disposed of for money to pay the various expenses 
he has incurred and leave something besides, the under- 
taker suffers. If, on the other hand, he has a product 
which consumers value so highly that they will pay him 
more than enough to cover all the expenses he has incurred 
in its production, the surplus legally belongs, in accordance 
with existing laws, to the undertaker. This surplus is his 
profit, his reward for the risk, responsibility, and effort 
in undertaking and carrying through the productive proc- 
ess. The undertaker is a special kind of workman, and 
profit is a special form of wages paid to him by the consumers 
of his product. 

Suggestive "'-• ^^ what ways is the word "profits" used in 

Questions, commou busiucss speech? 

2. Why is it well to pick out one meaning of the word 
which we will all accept? 



230 ELEMENTS OF ECONOMIC THEORY 

3. Give, in your own words, a true illustration of profits in 
actual business. 

4. Give examples of cases where profits have been enormous. 

5. Show that a man who receives immense profits may not 
necessarily make the general public poorer than it was before. 
Explain. 

6. Show that in such a case the public may be even better 
off after having paid the man his profits, than not to have paid 
him anything and at the same time failed of enjoying the 
results of his efforts. Might society be still better off if he 
performed the same services for less pay? 

7. What difference is there between a man who sees valu- 
able goods in existence, and sets to work to get the ownership 
of those goods away from others and into his own hands, and 
the man who sets productive processes in motion, and thereby 
causes the production of a great new stream of goods from 
which he takes many for himself? Explain and illustrate by 
actual examples. 

8. Which man is the nearer right? Why? 

In general, the worker for wages does not share 
in the risk of an enterprise. He makes a con- 
tract with an employer to spend a certain amount of time in 
adding utility to materials owned by the employer, for which 
effort he is to receive a certain payment in money or goods. 
This payment is often made to him before the employer has 
disposed of the utility produced to traders or to consumers ; 
commonly, also, before the material, as a whole, has been put 
in the form of a completed consumption commodity. Whether 
the commodity, when completed, proves valuable to society or 
not, the wage-worker usually has his wages. But wages are 
not, as a rule, paid before the receiver of them has created 
utility for the employer. Hence the employer, in paying 
wages, does not, as a rule, do more than give his workers 
consumption goods, less in value than the utilities pre- 
viously created for him by them. If employer and em- 
ployed are regarded aa cooperators in a productive enterprise, 



SHARING THE PRODUCT 231 

both of whom expect to be rewarded for their efforts out 
of the final value of the completed product, the employer 
in fact buys out the gradually accumulating shares of the 
employed in the final product for successive cash payments — 
wages. 

Of course, what has just been said applies especially to 
dkected workers in the production of wealth, — potential 
utilities, — rather than in the production of services, — actual 
utilities. By the necessity of their nature, services must be 
consumed as soon as produced. Therefore, the goods which 
service producers get in return for their own products are 
clearly payments for completed consumption commodities. 
As a rule, the terms, salary and fee, are used more commonly 
than wages to describe the rewards received by producers of 
services. 

Suggestive l" Compare persons who receive a salary with 
Questions, thosc whosc pay is commonly called wages, in 
respect to losses suffered in pay when occasionally absent from 
work. 

2. Compare, in length and definiteness, the contract for 
employment made by a salaried person with that of a wage- 
worker. 

3. In which case is the personal relationship between 
employer and employed the closer? Give examples. 

4. In respect to the upper and lower limits of wages : 

a. Can wage-earners, as a class, continually receive 
less wages than will keep them and their families 
alive? Why? 

h. As business is now organized, can they habit- 
ually take for their own use the whole stream 
of consumption goods produced by their aid? 
Why? 

c. What other groups of persons have claims on 
this product? Why will not some group sur- 
render habitually its claim to a share in the 
product? 



232 ELEMENTS OF ECONOMIC THEORY 

d. Did yon ever hear of a strike where the strikers 
did not seem to realize that there was any limit to 
the wages that could be paid them? Give some 
account of it. 

5. Within the maximum and minimum limits of wages sug- 
gested above, what does the social or market value of differ- 
ent grades of labor have to do with the amount of wage given 
to a single person? Explain. 

6. .How are the individual valuations of a certain kind of 
labor, out of which the market valuation is made up, affected 
by the absolute utility and quantity of labor? Explain. 

We have seen that natural resources are a 

Bent. 

primary requisite in production. We have also 
seen that civilized societies protect men in the exclusive 
possession— full ownership — of tillage lands, forests, mines, 
building sites, water power, etc. For purposes of turning 
machinery, one waterfall is better than another ; for mining 
purposes, one mine surpasses another ; for raising wheat, two 
tracts of land differ; for residence purposes, and for town 
sites, men prefer one tract of land to another. By virtue, 
therefore, of the superiority of the natural resources owned by 
some persons over natural resources of similar kinds owned by 
others, those who own the best natural resources for the pro- 
duction of goods, grain, timber, ores, coal, factories, homes, 
etc., have an advantage over other persons in the production 
of these goods. The advantage which comes to a man by 
virtue of his ownership of a superior natural resource, 
whether he gets this advantage by utilizing it himself or 
by selling its use to some one else, is rent. In cases where 
there is public ownership of relatively good natural re- 
sources, rent may be collected by the public. The fact 
that one piece of land is superior to another for a certain 
purpose, makes men who desire land for that purpose will- 
ing to pay something for the use of the better piece. The 
fact that land is variously owned determines to whom this 
payment goes. 



SHARING THE PRODUCT 233 

The "Unearned ^^^y P®^^^^^' ^Specially socialists and the fol- 
increment." Jo^ers of Henry George, point out that a natural 
resource often becomes more valuable for residence and pro- 
ductive purposes, not from any improvements which the 
owners themselves put upon their property, but because of the 
mere increase in numbers of the people, with all their needs 
and productive enterprises, near this particular natural 
resource. Owing to its scarcity for particular purposes, it 
increases in value, and this increase in value (increment) is 
"unearned" by the owner. It was really caused by the 
society which has grown larger and more complex near it. 
Their conclusion is that the increase in value, the "unearned 
increment," belongs not to the individual owner, but to 
society. 

From this point of view, then, there is one direct line of 
study and thinking which will lead toward a knowledge of 
what single-taxers and socialists think ought to be done. 

The following extended extract from the Eeport of the 
Bureau of Labor Statistics, Illinois, for 1894, explains itself in 
this connection: 

ECOKOMIC HISTORY OF A QUARTER ACRE 11^ CHICAGO 

"Probably the most striking illustration ever made of the 
pecuniary advantages of social growth which attach to land 
well situated to command public benefits, was presented at a 
dinner of the Chicago Eeal Estate Board, in November, 1893, 
by F. E. Chandler, a real estate expert of long experience, 
whose integrity and conservative judgment give to his state- 
ments exceptional importance. It consisted of a table show- 
ing the economic history, year by year, from 1830 to 1894, of 
the most valuable quarter acre of land in the city of Chicago. 
This table is a genuine contribution to economic data. 

"Mr. Chandler's preparatory labors were arduous and con- 
scientious. He first searched for the prices at which numer- 
ous valuable sites in the business center of the city had been 
sold since 1830; and though no single site had been 
transferred often enough to indicate its annual changes of 
value, the great mass of statistics which Mr. Chandler col- 
lected as to prices in the neighborhood of every lot that came 



234 ELEMENTS OF ECONOMIC THEORY 

within the range of his e:xamination, together with the prices 
of each such lot itself, enabled him to fairly estimate the land 
value of that neighborhood. By applying this method to 
several of the more valuable neighborhoods of the business 
section, and confirming his estimates by reference to public 
records, private archives, and market reports, he ascertained 
the different values at different times. Mr. Chandler then 
obtained the opinions of one hundred of the best posted real 
estate men in Chicago as to the most valuable quarter acre in 
the city. Preponderance of opinion settled upon the southwest 
corner of State and Madison streets, part of the school fund 
property controlled by the Board of Education. This had 
never been sold, but with the information he had already 
collected regarding the prices of neighboring property, Mr. 
Chandler was able to determine the value of the quarter acre 
in question for each year from 1830 to 1894. This is the 
property to which the table relates. 

"But for the figures showing the number of improved 
average Illinois farms,^ and the number of days' or years' 
work at unskilled labor^ that would have been necessary each 
year to buy this quarter acre, the table on the opposite page is 
as Mr. Chandler constructed it, the barometrical changes 
referring of course to business conditions. 

"Here we find this quarter acre of raw prairie land near the 
mouth of the Chicago River, worth, in 1830, when the popu- 
lation of Chicago numbered fifty people, but $20 in money, or 
13^ days' unskilled labor. It would not then have exchanged 
for one one-hundredth part of an average Illinois farm of the 
present time. With population increasing and business prom- 
ising, this quarter acre rose in value year by year until, in the 
boom of 183G, it was worth $25,000. At that time, it would 
have taken fifty-five years' unskilled labor to buy it, and it 
would have exchanged for twelve average Illinois farms of the 
present time. But the panic came in 1837, and this quarter 
acre fell to almost one-tenth of its boom value. Tln-ough- 

'The average size of farms, 62.38 acres, and the average value, 
$32.87 per acre, are taken from the report of this Bureau [Labor 
Statistics, Illinois], for 1890, p. 257. 

^Unskilled labor is estimated at $1.50 a day for each year of the 
l^eriod. Part of the time it was less, and part of the time more ; 
but this sum will be recognized as fair for the purposes of the 
comparison. 



SHARING THE PRODUCT 



235 



Changes of Barometer, 



Popula- 
tion of 
Chicago. 





a 


a 




03 


d 


Value of 


^i 


^S 


quarter 


o 


■a^ 


acre. 


"3 fe 


fl u 




s^ 


3^ 




q 


a 




«! 


< 


$20 






22 


io 




30 


40 




50 


67 




200 


300 




5,000 


2400 




25,000 


4(10 




3,000 




88 


2,500 




17 


2,000 




20 


1,500 




25 


1,250 




17 


1,000 




20 


1,100 


10 




1,200 


10 




5,000 


20 




15,000 


200 




12,000 




20 


13,000 


9 




15,000 


15 




17,500 


17 




20,000 


14 




25,000 


25 




30,000 


20 




35,000 


17 




40.000 


14 




45,000 


12 




35,000 




22 


30,000 




14 


29,000 




3 


28.000 




3 


28,000 






32,000 


15 




33,000 


3 




36,000 


13 




45.000 


25 




57.600 


28 




65,000 


12 




80.000 


23 




90,000 


12 




120,000 


33 




100,000 




17 


125,000 


25 




100,000 




20 


95,000 




5 


92,500 




3 


90,000 




3 


90,000 






95,000 


5 




119.000 


25 




130,000 


10 




145,000 


12 




176.000 


21 




238.000 


36 




250,000 


5 




275,000 


10 




325,000 


18 




*435.000 


34 




600,000 


38 




750,000 


25 




900,000 


20 




1,000,000 


11 




1,000,000 






1,000,000 






1,250,000 







Number 
of average 
Illinois 
farms at 
|2,050, nec- 
essary to 
buy the 
quarter acre, 



Number of 
years' work 

at $1.50 a 
day and 300 
days to tho 
year, nec- 
essary to 
buy the 
quarter acre. 



Clearing 

Fair., 

War storm 

VRising ) 

Booming 

Panic 

] I 

}■ Depression ^ 

] 

> Rising. 

Booming 

Panic 

Showers of gold 

Mirage of wild cat 

1 f 

}-E,ismg .{ 

J I 

Drought 

Buoyant 

Booming 

Panic 

[Depression 



[■Great war clouds... . ■{ 

J I 
Calm 

] \ 

} Rising , 

1 
J 

Very hot 

Booming 

Panic , 

1 
I 
y Depression 

J i 
Gold rays 

] f 

^Rising.. \ 

Stormy 

1 f 

f Rising higher •! 

J I 
Booming 

( Columbian sunshine j 
( overcomes panic. . ) 



50 

100 

200 

350 

2,000 

3,265 

3,820 

4,179 

4,000 

4,200 

4,470 

5,000 

6,000 

7.589 

8,000 

12.088 

14.169 

16.859 

20.023 

23,047 

28.269 

34.000 

38.754 

60,662 

65.872 

80,023 

84,113 

93,000 

91,000 

95,000 

109.000 

120,000 

138,000 

160,000 

169.353 

178.900 

200,418 

220,000 

252,054 

272,043 

298,977 

325,000 

367,396 

380,000 

395.408 

400,000 

407,661 

420,000 

436,731 

465.000 

503,298 

530,000 

560,693 

590,000 

629,985 

700,000 

825,880 

850,000 

875.500 

900,000 

1,098,570 

1,200.000 

1,300,000 

1.400.000 

1,500,000 



0.009 
0.011 
0.015 
0.024 
0.098 
2.44 
12.2 
1.47 
1.22 
0.97 
0.73 
0.81 
0.49 
0.54 
0.59 
2.44 
7.32 
5.85 
6.34 
7.32 
8.54 
9.76 
12.2 
14.63 
17.07 
19.51 
21.95 
17.07 
14.63 
14.15 
13.66 
13.66 
15.61 
16.1 
17.56 
21.95 
28.1 
31.71 
39.02 
43.9 
58.54 
48.78 
60.73 
48.78 
46.39 
45.12 
43.9 
43.9 
46.39 
58.05 
63.41 
70.73 
85.37 
116.1 
121.95 
134.15 
158.54 
212.2 
292.2 
365.85 
439.02 
487.8 
487.8 
487.8 
609.76 



* Authority of Real Estate Board "Valuation Committee. 

^ This represents the number of days at $1.50 a day necessary to buy the quarter acre 



^36 ELEMENTS OF ECONOMIC THEORY 

out the sncceeding bnsinesg depression, it continned to fall, 
until 1842, when it reached bottom at a value of $1,000, 
which was five times as much, however, as its value just 
before the boom began. 

"With the return of better times in 1843, and an increase of 
population, the quarter acre began again, though timidly, to 
rise in value; but in 1845, with a largely increased popula- 
tion, it had risen to $5,000, and in 1846, in the second boom, 
to $15,000. The boom was followed as usual by a panic, and, 
notwithstanding an increase in population of eighteen per 
cent, the value of the quarter acre di'opped to $12,000. The 
collapse of this boom, it will be observed, left the property at 
a value twelve times higher than the point to which it had 
dropped upon collapse of the previous boom. 

"The gold discoveries and a continual growth in population 
revived the value slightly in 1848. From that time on, it rose 
rapidly to a culmination of $45,000 — equal to twenty-one 
average Illinois farms of the present time, and one hundred 
years of one man's labor — in the boom year of 1856. The 
panic of 1857 at once brought it down to $35,000, and the 
succeeding period of hard times continued to reduce it until, 
in 1861, it was as low as $28,000. But, from this point, it 
steadily rose through the war and the brisk times that fol- 
lowed, and even through the period of the great fire, until 
1872, when it was worth $125,000. Once more there came a 
panic and a depression, out of which this quarter acre emerged 
in 1878 with a value of $95,000 — nearly four times its value 
on the crest of the first boom, six times its value on the crest 
of the second, and twice its value on the crest of the third. 

"With the return of better times, in 1879, the value of the 
quarter acre sjirang forward once more, and since that, 
through good times and bad, it has gone steadily on. In the 
boom year of 1890, it was worth $900,000. The next year it 
went up to $1,000,000, where it remained until 1894, when 
its value was estimated at $1,250,000. 

' 'Six hundred average Illinois farms would not now exchange 
for that quarter acre of raw prairie land, and nearly 3,000 
years of the labor of one man would be required to buy it. 
If, 500 years before the Christian era, some man had obtained 
employment at the equivalent of $1.50 a day, had, like some 
Wandering Jew, been preserved through all the vicissitudes 
of the centuries, had been miraculously sustained without 
expense for any of the necessaries or luxuries of life, had 



SHARING THE PRODUCT 237 

done his work regularly from that day to this, 300 days in 
the year without losing a day, and had hoarded all his wages, 
his savings would not yet be enough to buy this quarter acre 
of prairie land at the mouth of the Chicago Eiver." 

In studying this problem of the "unearned increment" 
further, at least these questions should be continually in 
mind : 

1. May a system of land owning, which might have worked 
well if established in a country from the beginning, work 
great injustice if quickly put in place of another centuries 
old? 

2. Can this injustice be avoided hy a slow process of substi- 
tution? 

3. May the expected advantages to be secured be offset by 
disadvantages some of which are not yet apparent? 

4. On the whole, are you sure the change should be made? 
Why? 

5. If so, are you sure how it should be made? How? 

All sorts of persons, from the boys and girls who 
put some of their few pennies into their "own 
bank," or a "real savings bank," instead of spending all for 
candy, marbles, or tops, up to the millionaire who buys shares 
in railroads, mining companies, wheat farms, canals, and 
factories, instead of spending all his income in fancy dress 
balls, entertainments, art works, travel, and retinues of serv- 
ants, have the choice between immediate consumption of all 
the goods that come to them and postponement of consump- 
tion of a part or the whole of their income. From these 
unconsumed portions of thousands of incomes, — savings, they 
are often called, — come the funds which are loaned to others, 
and the great varieties of tools, machinery, buildings, and 
improvements of all sorts, which are called respectively money 
capital and vested capital. 

Capital is borrowed from the owners for two purposes: 
first, that the one who borrows may, by its use, make his 
business more productive of utility ; second, that the borrower 



338 ELEMENTS OF ECONOMIC THEORY 

may have cousumption goods now that he must otherwise wait 
for. In either ease, the lender acts upon the advice that "a 
bird in the hand is worth two in the bush," and demands not 
only that goods equal in amount to those he lends shall be 
returned to him at some future time, but more goods. This 
excess in goods, which, in the opinion of lenders, makes 
future possession of a larger quantity equal to the present 
possession of a smaller quantity of goods, is interest. 

But a great deal of capital is not thus loaned to others. 
Much is used by its owners in their own productive enter- 
prises. Here again, the capitalist expects to get an excess of 
goods in the future over those he refrains from consuming 
now. In these cases, just as truly as in the cases where cap- 
ital is loaned, the excess of future over present goods is 
interest. 

The rate of interest on loans, which is the kind we hear 
most about, is subject to all those individual and social forces 
which we saw, on page 211, to be affecting the individual, and 
consequently the market price, of any commodity that is 
freely bought and sold. On the one hand, the rate cannot go 
permanently higher than borrowers for productive purposes 
(as this is the most important cause of borrowing) can get 
from their productive enterprises by the aid of the capital bor- 
rowed. On the other hand, the rate cannot go lower than the 
amount whicli will induce ovv^ners to postpone the control of 
their own goods from the present to some future time. 

In ordinary loans, there is some possibility that the lender 
will lose his principal, and the rate is higher on this account. 
In what has been said, this possibility has not been considered, 
and the interest above defined would be pure interest. 

Suggestive ^- Compare the rate of interest paid by the 

Questions. United States on bonds with that paid by a 
company formed to mine gold in the Klondike. Which is 
nearer pure interest? Why? 

2. Give an illustration of a case where a farmer can 
"afford" to borrow capital. 



SHARING THE PRODUCT 239 

3. Do the same for a physician, grocer, teamster, corpora- 
tion. 

4. Would men ever postpone consumption of some of their 
income if there were no possibility of getting interest on it? 
Explain. 

5. How would the amount saved in the country, as a whole, 
under such circumstances, compare with the amount saved 
now? How do you know? Are you sure you are right? 

6. Did you ever hear of a case where owners of capital have 
paid something for having it taken care of? Explain. 

7. If this was a case of less future goods preferred to more 
present goods, was the deficiency negative interest? Explain. 

8. Is the loan rate of interest different in different countries 
at the same time? Why? 

9. Is it different in different parts of the same country at 
the same time? Why? 

10. Do you know all about the causes which affect rates of 
interest? 

Varieties of ^^® diagram on the next page suggests the great 
thr^l'ac'tJS-^of^^^'^^^y ^^ ownership of the "factors of produc- 

production." tiou" now existing. It will also help us to 
understand how the products of various enterprises are shared. 
In the first case, line No. 1, which may be illustrated by a 
farmer who owns his own farm, stock, buildings, tools, and 
machinery, plans his own work and carries it on with his own 
hands, the problem of sharing the product of the business is 
Just that of determining how much society will take in the 
form of taxes. All the rest belongs to him, and, although 
usually not so divided and named by him, is really composed 
of profits, rent, interest, and wages. 

In the second case, the farmer has hired workmen. Taxes 
are determined as in the first case. How much of the value 
of the rest of the product goes to the hired workmen and how 
much to the farmer himself, is determined by bargain, a wage 
contract, between the two parties. If each party is primarily 
seeking his own advantage, the contract is determined by con- 



240 



ELEMENTS OF ECONOMIC THEORY 





Social 
Control. 
(Legal.) 


Managers. 


Workmen. 


Owners 

OF 

Capital. 


Owners op 

Natural 

Resources. 


1. 


Various 

political 

units. 


One man. 


The same 
man. 


The same 
man. 


The same 
man. 


3. 


<< 


One man. 


Another 

man or 

men. 


Same as 
manager. 


Same as 
manager. 


3. 


(< 


One man. 


Another 

man or 

men. 


Another 
man. 


The same 
man. 


4. 


(( 


One man. 


Another 

man or 

men. 


Another 
man. 


Another 
man. 


5. 


" 


Directors 
of a cor- 
poration. 


Directors 
and stock- 
holders. 


The same. 


The same. 


6. 


<< 


Directors 
of a cor- 
poration. 


Other men. 


Directors 
and stock- 
holders. 


The same. 


7. 


(( 


Directors 
of a cor- 
poration. 


Other men. 


Stockhold- 
ers of 
another cor- 
poration. 


The same. 


8. 


(C 


Directors 
of a cor- 
poration. 


Other men. 


Stockhold- 
ers of 
another cor- 
poration. 


Stockhold- 
ers of 
another cor- 
poration. 



siderations similar to those mentioned in Chapter I, Part III. 
Taking one year with another, it is evident that the farmer 
would not continue indefinitely to pay in wages more than the 
increase in the value of his product (either to use at home or 
to sell) resulting from the labor of those he hired. Whether 
he would be compelled to pay well up toward this increase in 
the value of his product due to hired labor, would depend upon 
the eagerness of men to sell their services to him. And this 



SHARING THE PRODUCT 241 

eagerness of men to sell their services would depend largely 
upon their opportunities to produce independently, or sell 
their services to others. 

In the third case, one man might own a farm and the stock 
and tools, a second man carry on the farm as manager, and a 
third man, or men, work for this manager as wage- workers. 
Here, as in the first two cases, the total value of the product 
places a limit to the rewards of all concerned. Taxes are 
theoretically determined by the voters. The manager must 
make two bargains instead of one, to determine how the value 
of the rest of the product shall be divided. He must make 
one bargain with the owner of the land and capital, and a 
second bargain with his hired men. The bargain with the 
hired men would evidently be determined by the same con- 
siderations as in the second case. The amounts the manager 
could continue to pay for the use of the natural resources and 
the capital would be limited by the increase in the value of 
the product at his disposal due to their help. More than this 
he could not regularly pay because, to work without capital 
and land under his own control, simply as a hired worker him- 
self, would pay him better. Whether he would be forced to 
pay well up to this limit would depend upon the probable suc- 
cess of the owners in getting more value out of their property 
by using it themselves, or selling its use to some one other than 
this particular farmer. 

The fourth case differs from the third, in the fact that there 
is a fourth separate party to be considered. If one man 
owned a farm and another stock and tools, which farm and 
equipment a third man used with the aid of hired men, this 
case would find an illustration. The case does not differ from 
the third except in the fact that the manager would need to 
make one bargain with the owner of land and another with the 
owner of capital. The amounts that all taken together could 
receive would depend upon the productivity of the enterprise ; 
taxes would be determined in the same way as before; the 
manager would be limited in the amounts he could pay in 



242 ELEMENTS OF ECONOMIC THEORY 

rent, interest, and wages to the increase in value of his product 
resulting respectively from land, capital, and labor ; and the 
actual payments he could be compelled to make would approach 
these limits as the landlord, capitalist, and wage-worker found 
greater or less difficulty in disposing of what they had to sell. 
The cases numbered from 5 to 8 present the same variations 
in ownership and possibilities for bargains, except that in 
them legal persons — corporations — each of which may be com- 
posed of many men and women, are substituted for the indi- 
viduals — natural persons — of the first four caaes. In these last 
cases, therefore, the number of persons concerned in the 
various bargains may be indefinitely large. For example, take 
the case of a railroad company that hires thousands of work- 
ers, borrows millions of dollars, leases thousands of miles of 
railway and thousands of cars from other companies. Here, 
also, taxes are within the power of voters, and managers make 
contracts with landlords, capitalists, and wage-workers for 
certain payments which, during a period of years, must all be 
paid out of the value of the product of the enterprise. 
Summary of AH of this bargaining for shares in the products 

Conditions « , . . 

Aflfecting Bar- of busincss enterprises, after taxes have been 

gains for Shares . . 

of Product, deducted, is dependent upon the valuations 
made by the bargainers themselves and by the valuations of 
many others, which result in market values — called market 
prices when expressed in money. It is essential to remember, 
also, that individual values depend upon the two elements of 
absolute utility and quantity. The more imperative the 
human want that a utility tends to satisfy, and the less the 
quantity of the appropriate utility available, the higher the 
value of a unit of it. On the other hand, the less imperative 
the want and the gi'eater the quantity of the appropriate utility, 
the less its unit value. These two elements may be briefly re- 
ferred to as the quality and quantity elements of utility in value. 

With this re-presentation of the elements of value in mind, 
note the following combinations of the factors in production 
as they affect the sharing of the product in a given industry. 



SHARING THE PRODUCT 



243 



Natural resources suitable 
relatively abundant 



for the purpose 



Suitable capital relatively abundant 

Laborers qualified for the work relatively 
scarce 



Capable managers relatively many 

II 
Suitable natural resources relatively scarce- 
Suitable capital relatively abundant 

Efficient vrorkers relatively many 

Capable managers relatively many 



Ill 

Suitable natural resources relatively abundant 

Suitable capital relatively scarce 

Efficient workers relatively plenty 

Capable managers relatively many 

IV 
Suitable natural resources relatively abundant 

Suitable capital relatively abundant 

Efficient workers relatively many 

Capable managers relatively few 



Relatively small 

share of product. 
Relatively large 

share of product. 
Relatively small 

share of product. 
Relatively small 

share of product. 

Relatively small 

share of product. 
Relatively small 

share of product. 
Relatively small 

share of product. 
Relatively large 

share of product. 

Besides the above combinations, it is evident that there may 
be many more formed by any two of the factors being scarce 
relatively to the other two, and by any three being scarce 
relatively to the other one. How many of all these mathe- 
matically possible combinations we can find illustrations for in 
the actual business enterprises with which we are familiar ig 
an interesting c^uestion, 



Relatively small 

share of product. 
Relatively small 

share of product. 
Relatively large 

share of product. 
Relatively small 

share of product. 

Relatively large 

share of product. 
Relatively small 

share of product. 
Relatively small 

share of product. 
Relatively small 

share of product. 



244 ELEMENTS OF ECONOMIC THEORY 

Suggestive ^- "^^^-t do you know about the rent of land in 
Questions, ^^q busiest part of a town, or city? 

2. Suppose you wished to raise various garden products, 
and that a sandy hillside, far from a town, was offered you 
for nothing, and an equal area of fertile land near the town for 
ten dollars per acre each year; which would you take? Why? 

3. How ai"e general managers of railways paid in comparison 
with section hands? Why? 

4. How are college presidents paid in comparison with 
country school teachers? Why? 

5. How are skilled workers paid in comparison with 
unskilled? Why? 

6. Do you know of any cases of highly trained doctors, 
lawyers, teachers, engineers, or hand-workers of any kind, who 
can barely get a living? Why? 

7. What is the tendency of the increase of electric street- 
car lines from large cities and towns to suburbs, towards 
raising or lowering the yearly rental and the price of good 
residence property within a mile or two of the business cen- 
ters? Why? 

8. What is the effect of the same lines upon the rental and 
price of residence property in the suburbs? Why? 

9. What has been the tendency of rents of agricultural pro- 
perty in England and New England during the last twenty -five 
years? Why? 

10. Do you know of any cases where natural resources suit- 
able for a certain kind of product are growing scarce? Illus- 
trate. 

11. Of any cases where such natural resources, though still 
actually abundant, are made scarce to the general public 
through the monopoly ownership of a few men? Illustrate. 

] 2. Show that these two kinds of scarcity give the owners 
the same kind of power in sharing the product. 

13. Do you know of any cases where laborers suitable 
for a certain kind of work have been made purposely scarce? 
Illustrate. Why? 



SHARING THE PRODUCT 245 

14. Have any cases occurred to you in reading and answer- 
ing the above questions which can not be explained fully by 
the various combinations suggested above which affect bar- 
gains for shares in the product? If so, state the cases and 
your difficulties. 

15. How may rent, interest, wages, and profits all be higher 
in one country than in another? 

At first, it would seem that only two things 
Living may wcrc ueccssary to make all connected with a 

Result rrom an . nn. /. ,i ,•/.,• o ,t • 

Abundance of busiucss wcll oft SO far as the satisfaction of their 
wants is concerned. These two things are : (1) 
that there should be a large product in goods, and (2) that 
there should be a fair division of this product among all con- 
nected with the enterprise. 

If the goods produced by a single person or business were 
various enough to satisfy all the wants of the persons con- 
cerned, the fulfilment of the two conditions above would 
suffice. During the colonial days in the United States, and 
during the period of the Home System of industry in Eng- 
land, we have seen that this state of things was more nearly 
realized than is true to-day. The more food people raised, 
the more clothing they made, and the more services they 
rendered each other in their homes, the more comfortable 
they were if they were fairly taxed. 

But now those concerned in a special business find only a 
few of their wants, at the most, satisfied by their own product. 
The bulk of this product is for sale, and the satisfaction of 
their other wants is limited by the goods which can be bought 
with the price received. Therefore, the real product that is 
to be shared is not the more or less abundant goods produced, 
but the market value of those goods. Now, market value, it 
will be remembered, is lowered by an unusual, or excessive, 
quantity of any commodity. Therefore, it is not only a pos- 
sible, but a very common, experience for a group of workers 
to do their very best to produce a large amount of their special 
commodity in the hope of an abundant reward, only to find 



246 ELEMENTS OF ECONOMIC THEORY 

this product valued so low in the market that they can buy 
very little with the price obtained. It, therefore, is not only 
possible, but it very frequently happens, that so much of a 
certain commodity is offered for sale at a certain time, that it 
has very little market value. Fruit growers often sell the scanty 
crop of one year for more money than they get for the abun- 
dant crop of the year before. Eaisers of wheat and other 
cereals have also had similar experiences. Manufacturers, 
miners, wage-laborers, and professional men have likewise 
often found themselves unable to sell their wares and 
services for much money because these products were so 
abundant. 

It is, therefore, plain that the economic purpose 

Not mere Qaan- , . . . -, 

tity of Goods of overv productive enterprise is fundamentally 

but a Valuable .... , .„ , , ,, , 

Product »e- to Create utilities that will be valuable — the more 

sired. 

valuable the product the greater possible reward 
for all concerned. The interests of those who furnish natural 
resources, capital, management, and ordinary labor power, are 
identical to this extent — to make the total product as valuable 
as possible for a given expenditure of the factors of produc- 
tion. But, in every special enterprise, the interests of those 
who furnish these factors, if all are different men or groups of 
men, are directly opposed to each other when it comes to 
sharing this value. 

Are the Inter- ^^^ Statement is oftcu made in public print 
fs\*8*and Laboi- ^^^^ there ought to be no conflicts between 
ers Identical? employers and employees, because one can not 
produce without the other, and, therefore, their interests are 
identical. The above discussion shows us just how far this is 
true. Using the word "capitalist" now in the broad sense of 
landlord, manager, and owner of capital in a true sense — which 
three functions the capitalistic employer often unites in him- 
self — and "laborer" as contrasted with him, the interests of the 
capitalist and the laborer are identical in desiring a total 
product of maximum value. Their interests are diametrically 
opposed to each other when that value is divided. 



SHARING THE PRODUCT 247 

The National ^^0111 the point of view of the people of a na- 
DiTidend. ^jq^ taken as a whole, so far as they produce all 
they use and do nob dispose of a surplus to other nations for 
goods in return, the desirable thing economically is that just 
as many and various goods as possible be produced. The 
greater the quantities and varieties of goods the more wants of 
the people can be satisfied, and to a greater degree. Make 
the national dividend just as large as possible, and, if there is 
a fair division of the goods, everybody will be economically as 
well off as possible. 

But if the nation produces certain things in excess of its 
own wants, and tries to exchange them with other nations for 
their goods, it is economically beneficial to the first nation to 
have its products not only great in quantity, but valuable. 
If the United States, for example, sells food products in 
Europe for European goods, it is beneficial to have those food 
products valuable, and the goods we want in exchange less 
valuable, so that we may get many for few. 

The World ^^om the standpoint of the world, it is desirable 
Dividend. |;}jg^^ goods of just 83 many kinds as possible be 
produced in the gi'eatest possible quantities consistent with a 
wise adjustment of these quantities to human needs. That 
one good should be exceptionally valuable in comparison with 
others would be to some personal or group advantage, but not 
to the advantage of all. What the world wants economically 
is that there should be enough goods produced per capita so 
that everybody may have a great variety of wants well satisfied. 
The world welfare, economically considered, varies directly 
with the abundance and variety of goods. 

National welfare, also, so far as the nation is self-sufficing, 
varies in the same way. But, so far as a nation engages in 
international trade, its welfare varies with the value of the 
goods it has to sell, and not necessarily with their abundance 
and variety. 

The individual productive enterprise, likewise, so far as 
those concerned with it use their own product, seeks only an 



248 ELEMENTS OF ECONOMIC THEORY 

abundant and various product. But, so far as it depends 
upon an exchange of its own product for other products, it 
desires its own product to be as valuable as possible. 

Mere abundance and variety of goods, therefore, tend 
toward social welfare. Individual advantage over the rest of 
society varies with the value of the commodity owned by the 
individual. Therefore, as the value of a unit tends to increase 
with scarcity, there is a great temptation for men and corpora- 
tions to make the goods in their possession valuable through 
limitation of quantity, rather than by an improvement in 
quality. 

The Classes of ^^om the forcgoing discussion of the principles 
Whom the'^Kco- "pon which products are shared, the following 

"oTth^ndf-^* general statement will be seen to be true. So 
Tiduai Depends, far as a man bargains the services and wealth 
which he produces with the rest of the world in return for 
other services and forms of wealth, four classes of persons 
affect the result : 

1. Himself. He can not receive goods from others unless he 
has goods to give in exchange. 

3. Others who are producing the same kind of commodity 
as his. He may produce a commodity which ordinarily men 
feel a great need for, but, if so many other persona are 
engaged in the production of the same commodity that all he 
can produce of it is valued very lightly by the rest of the 
world, he can get but few of the goods of others in return. 

3. Persons who are producing the goods he is to get in 
exchange for his own. Upon their skill and faithfulness in 
producing goods suited to his need depends the ultimate satis- 
faction of his want. 

4. Persons who are producing the same kinds of goods as 
those he actually gets in exchange for his own. If few per- 
sons, relatively to the needs of men, are engaged in the pro- 
duction of the goods he desires, they may be valued so highly 
that he can get but few of them for his own product. On the 
contrary, they may be produced in such abundance that their 



SHARING THE PRODUCT 249 

value is low, and his product may be exchanged for many of 
them. 

Unless, therefore, a man can foretell not only his own 
product but also the products of those who are doing the same 
kind of work as himself, and the product of all those engaged 
in producing the goods he hopes to get in exchange for his 
own, the degree of satisfaction that his efforts will secure for 
himself is uncertain. 

Two facts stand out as one studies the details of distribu- 
tion. 

1. In these modern days, when almost the whole output 
of each productive enterprise is not consumed by its pro- 
ducer, but sold for what it will bring, not merely maxi- 
mum quantities of goods, but goods of maximum value are 
desired. The value of the product limits the total rewards 
for the producers as a whole, 

2. The share of this total value that each group of producers 
gets for itself is largely decided by contracts which are affected 
by all the individual and social causes which affect the mar- 
ket price of any commodity. 



250 ELEMENTS OF ECONOMIC THEORY 



Chaptee IV 

SOME CONSIDEKATIONS WHICH APFECT PEODUCTION AND 
DISTEIBUTION 

Some Uses of ^^ should never be forgotten that money as a 
Money. medium of exchange is simply an instrument. 
Man has devised it, as he has tools and machinery, simply 
because, by its use, he thinks he can secure more consumption 
goods than without it. By the use of money, man divides 
into two parts the process of exchanging the commodity he 
has for those he wants. After he has received money for his 
own commodity, he may seek the commodities he desires in 
any market at any time. Money, therefore, enables man to 
separate the two parts of his exchange by a few hours, days, 
or even years of time. It also relieves him of the necessity of 
finding men with various desired commodities which they are 
willing to exchange for his. The fact that the silver and 
gold of which metallic money is largely composed are desired 
as consumption goods in the form of plate, gilding, jewelry, 
etc., must not be permitted to disguise the fact of the purely 
representative character of these metals when used as money. 
Money also enables a man to compare all commodities with 
each other quickly, by means of their prices. Goods having 
the same market price are often exchanged directly one for 
the other without the use of money as a medium of exchange. 
Money thus used, or the name of some unit of money thus 
used, is often called a common denominator, or name, of 
values. 

Changes in the '^^^ value of gold compared with silver and 
Value of Money, ^j^g values of both in Comparison with all other 
commodities vary in the markets of the world, just as other 
commodities vary in value with reference to each other, in 



PRODUCTION AND DISTRIBUTION 251 

accordance with their quality and quantity elements, their 
effective utilities. Let some great new social need for 
either metal be discovered, or created by legislation, and 
the value of that metal tends to rise. The reverse is 
also true. Increase in quantity tends to lower the value 
of money metals as it does of wheat, and conversely. Mere 
coinage of either metal has comparatively little to do with 
raising or lowering the value of that metal in comparison 
with the other, or in comparison with other commodities. 
This is true because coinage of itself is only an official weigh- 
ing and stamping of metal to the end that each coin may be 
known to contain a certain amount of metal of a certain 
degree of fineness. But the legislation of a single nation, and 
to a greater degree the legislation of many nations, may greatly 
affect the value of one metal compared to another, and of both 
compared to the other commodities of the world. This is true 
because legislation decides whether or not gold shall have, in 
addition to its various other utilities to individuals and to 
society, the further social utility of a legal tender medium of 
exchange. Legislation decides the same question for silver. 
Thus, by legislation, the quantity of a metal may be changed 
relatively to the wants it is allowed to help satisfy. This 
tends to change its value. 

This possibility of change in the value of money 

^dTby'oenfrai' ^^ Comparison with all other commodities, 

*^*p?im*" whether caused by legislation or independent 

of it, is a fact of profound economic im- 
portance. Such a change in the value of money would be 
the same thing as a rise or fall in the prices of all things 
except the money metals — ^what is called general rise or fall of 
prices. If a man who receives money for his own product 
expends it immediately for other goods, a general rise or fall 
in prices makes little difference to him. If prices are low, 
he sells at a low price, but also buys much with little money. 
If prices are high, he sells for a good price, but also finds 
this larger sum able to buy no more goods than he bought 



252 ELEMENTS OF ECONOMIC THEORY 

with little money. Suppose, however, that a seller postponed 
for a few years the purchase of goods with the money obtained 
for his own product. Now, a general rise in prices means loss 
to him, because he sold at a low price and must buy at a high 
price. On the other hand, a general fall in prices means gain 
to him, because he sold at a high price and can buy at a low 
price. Every person who saves a part of his income, puts by 
something for a rainy day, must be affected favorably or 
unfavorably by a general rise or fall in prices. Great changes 
in general prices, that is, in the value of money, are sometimes 
detrimental, sometimes beneficial, to the gi'eat class of men who 
allow considerable time to pass between their sales and pur- 
chases. In other words, their real share in the distribution of 
consumption goods is larger or smaller as general prices rise 
and fall. 

Another great group of men who are also affected by 
changes in the value of money is composed of debtors and 
creditors. It is the custom for a man who borrows to agree 
to pay back at some future time the same number of dollars 
that he borrows. If, therefore, a great change in the value of 
those dollars takes place between the time of borrowing and 
repayment he must return in reality a greater or less quantity 
of goods than he borrowed. If prices have fallen, the dollars 
he pays back will buy much more than the dollars he bor- 
rowed, and conversely. Not only are individual debtors and 
creditors affected by changes in money values, but all salaried 
men whose salaries are permanent, all savings banks, insur- 
ance companies, loan associations, institutions with endow- 
ments, great business enterprises that have issued bonds, and, 
finally, all towns, cities, counties, and states that are in debt, 
and the nation itself, are likewise affected by changes in 
the general purchasing power of money. Every taxpayer, 
whether an individual debtor or creditor, or not, is therefore 
affected to the amount of his responsibility for the various 
debts of the political units in which he lives, by changes in 
the value of money. 



PRODUCTION AND DISTRIBUTION 253 

Employers, also, who pay certain sums for raw materiala, 
rent, interest, and wages, in order to produce a certain com- 
modity that can not be marketed until some time in the 
future, are often subject to disheartening losses because the 
price of their product has fallen between the time when they 
began to produce and the time they offer their product for 
sale. During a period of falling prices, therefore, managers 
are often timid and reluctant to undertake the making of a 
commodity that men stand greatly in need of, lest its falling 
price should involve them in loss. On the other hand, a 
period of rising prices often brings gains to an employer 
which encourage him to the point of recklessness and unsound 
business methods. 

From the point of view, therefore, of all persons who allow 
some time to pass between purchase and sale, of all debtors 
and creditors, and of all production which demands consider- 
able time before outlay can be covered by sale of the product, 
great changes in the value of money are undesirable. Conse- 
quently, all political parties, whether committed to gold 
monometallism, silver monometallism, national bimetallism, 
or international bimetallism, are practically agreed upon this 
point. Their differences of opinion emerge only when they 
begin to discuss the special measures by which a greater 
degree of stability in the value of money may be obtained. 

Important '^^^ maximum number of persons in a demo- 
Facts, cratic country ought to see at least the following 
facts clearly: 

1. What men want ultimately is not money, but consump- 
tion goods. 

2. Money per se is merely representative of other goods. 

3. The value of money is subject to change, both because 
the quantity of the metals of which it is composed changes 
relatively to the quantities of other goods in the world, and 
also because nations, through legislation, arbitrarily increase 
and decrease the number of human wants that money 
materials already in existence may for the time satisfy. 



254 ELEMENTS OF ECONOMIC THEORY 

4. Such changes in value directly benefit or injure all per- 
sons who allow considerable time to pass between the acts of 
selling and buying, all debtors and creditors, both private and 
public, and all business enterprises where the element of time 
in production is an important factor, 

5. Justice demands legislation which will secure the maxi- 
mum stability in the value of money, in comparison with 
values in general. 

6. The money question is one which often tends to 
place one man on one side and another on the other side for 
purely personal and business reasons. 

7. There has been in recent years, and may for a long time 
be, much honest difference of opinion about the immediate 
and permanent effects of various monetary policies. 

Suggestive ^- ^^ Capital oftcu borrowed for longer periods 
Questions, than thoso for which wage and salary contracts 
are made? Give examples. 

2. Give examples of long leases for natural resources. 

3. In cases where rent and interest at fixed rates have 
been promised for a period of years by some business, and 
meanwhile the value of money increases, that is, general 
prices go down: 

a. Is the fixed annual money rent and the fixed 
annual interest worth more or less in goods to the 
landlord and capitalist than when the contracts 
were made? Why? 

i. Is it hai'der or easier for the business to pay these 
rent and interest charges out of the value of the 
product than when prices were higher? Give 
illustrations of these two cases. 

c. When general prices fall in such cases, show that 
the proportionate shares of landlords, capitalists, 
undertakers, and wage-earners, in the product of 
particular businesses, are changed. 

4. Suppose long time leases and fixed interest charges for a 
term of years are as in 3, and suppose, also, a fall in the value 



PRODUCTION AND DISTRIBUTION 255 

of money — a rise in general prices — occurs, answer a, J, c 
for these conditions. 

5. Suppose statesmen should think it wise, on the whole, to 
pass some laws which tend to change the value of money; 
should contracts already made be subject to these changes, or 
only new contracts? "Why? 

6. Show that a wide range of facts must be considered 
before one can master the money question. 

7. Is it possible to make such laws about money that justice 
will be done to all? Explain. 

The Law of If a man has a vegetable garden in good cultiva- 

Diminishing -, . f ^ • l , - 

Betnms. tiou, and scts out to raisc, next year, twice as 
much of everything as he raised this year, he may possibly do 
it by doubling the fertilizer and doubling his care of it with 
spade, hoe, and garden hose. If he succeeds in getting double 
the return for double the effort and expense, the return per 
unit of outlay is the same as before. But suppose he tries a 
second time to double his garden products from the same 
garden, by once more doubling his outlay. The return is 
possibly a little larger than before, but when the total producb 
is divided by the total outlay the quotient has probably 
become less than at first. The proportional return has 
diminished. 

Farmers are familiar with this fact. It also becomes 
harder and harder, by the old methods, to get a ton of coal 
out of a deepening mine, and forests and fisheries sometimes 
give out altogether. 

The truth at the bottom of these common experiences is 
called the law of diminishing returns, and has been stated as 
follows: "An increase in the capital and labor applied in the 
cultivation of land, causes, in general, a less than proportionate 
increase in the amount of produce raised, unless it happens to 
coincide with an improvement in the arts of agriculture." ^ 

In this statement of the law, nothing is said about what 
may happen if the increase of capital and labor "coincides 

^Marshall, Principles of Economics, vol. I, p. 206. 



256 ELEMENTS OF ECONOMIC THEORY 

with an improvement in the arts of agriculture. " Thus far 
in this country, it may be said, in general, that this coinci- 
dence has been frequent, and, besides, new lands have con- 
stantly been taken up, so that our food and raw material 
supply have cost us, in general, less and less effort per unit of 
product instead of more and more. The experience of 
countries like China, however, has been different from ours, 
and the law states a fact of great importance in its bearing 
upon possible limitations of quantity of various goods, and 
their consequent increase in value. 

To emphasize the unprogressive nature of industries which 
the law supposes, in order to be literally true, the following 
statement of it may be made : 

If an increasing number of equally efficient men use 
methods and capital of the same general sort upon the same 
piece of land to produce goods of the same kinds, a time will 
come when the return per capita will begin to diminish in 
quantity. 

suegestive "'■• -^^® ^^^ ^^® hypothcscs of this law ever true? 

Questions. 2. Are they true for farming in one generation 
compared with the preceding? 

3. Illustrate for both answers, 

4. Show that farmers act upon the truth contained in the law. 

5. Show that the law is as true of lumbering as of farming. 

6. Show that it is true of mining; of fishing. Give illus- 
trations in the last three cases. 

7. Does this law mean that in any country, or in the world 
as a whole, if population continues to increase, an increasing 
per cent of the total population must necessarily devote them- 
selves to the production of food and raw materials? Why? 

8. If there were not a fact as the basis of the law, show that 
a large city could be fed indefinitely from the products of a 
single farm. 

9. Does the law mean that a point is ever reached when a 
farm can not be made to produce an extra bushel of wheat or 
barrel of potatoes? Explain. 



PRODUCTION AND DISTRIBUTION 257 

10. Why is truck farming carried on near towns and cities? 

11. If the land is good for wheat, why not raise wheat? 

12. Show the relation between the law of diminishing 
returns and the fact of rent. 

13. Starting from the raw material, does a manufactured 
product cost as much human effort now as formerly? Sup- 
pose the proportionate share of effort required to make the 
machinery is added, what will be your answer? 

14. If the raw materials of manufacture should cost more 
and more effort, and the manufacturing processes should cost 
less and less effort, would the total cost of manufactured 
goods rise or fall? Why? 

15. In what sense can there be said to be a law of increas- 
ing returns in manufacture? 

Are There Too Closcly conuccted with the fact of absolute limi- 
Many of Us? tatiou upou the natural resources of the world, 
and with the fact also of possible decreased productivity in 
proportion to effort, of any particular natural resource, is the 
question of numbers of men. Malthus saw only two alter- 
natives for the people of any nation, and finally for the world. 
One of these was a voluntary limitation upon the number of 
children that should be born. The other was increase in 
numbers until the per capita product was so reduced that the 
most unfortunate were cut off by hunger, pestilence, and 
war. It is an historical fact that numbers have been kept 
lower than they otherwise would have been by both of these 
methods. Among the most intelligent and provident people 
it has now become more a conviction than formerly that it is 
the right of every child born into the world to have a reason- 
able opportunity of living his life in decent comfort. 

The children of the most ignorant and inefficient of our 
people too often have no chance to earn an honest living 
except by selling their unskilled labor power for productive 
purposes. As the number of such unskilled workers is very 
large, the share of the value of the product that the individual 
worker has been able to get by contract is small. The curse of 



258 ELEMENTS OF ECONOMIC THEORY 

the poor man is his poverty. He is unable to get a high wage 
because there are so many of him for the unskilled tasks, and 
he has no efficiency for other tasks. On the other hand, he is 
unable to make himself efficient because he gets such a low 
wage that he can barely keep life itself. However the question 
of population as a whole may be answered, it is certainly true 
that there are now too many of the unskilled workers for their 
own economic good, so long as they have to sell their services 
in a competitive labor market. How those that are born may 
become more efficient, and how the number of births may be 
restricted by moral action to those who will have a chance to 
live an honest, complete, human life, are two problems which 
stare the world in the face. 
Slavery, Self- "^^ ^^^ already been suggested, the conditions 
comJerition*' ^^^^^cr which men work affect not only the 
-Etc. amount and quality of their product, but also 

the process of dividing the product. Perhaps the truth in 
the above would be stated better by saying that the manner 
of dividing the product is itself an important condition which 
variously affects the activity and efficiency of workers, and, 
consequently, affects favorably or unfavorably the product to 
be divided. The process of creating and the process of divid- 
ing the product act and react on each other. In the table 
on the opposite page,^ each student should fill out the blank 
spaces for himself. 

Suggestive ^- ^ scif -employment possible to the extent it 
Questions. y^Q,s oue hundred years ago? Why? 

2. What is the precise difference between profit-sharing and 
cooperation? 

3. If profit-sharing and cooperation result in a larger per 
capita product in goods, why will this not necessarily result in 
a larger per capita value? 

4. Suppose an employer deceives his employees about the 
amount of the product for his own gain, how will the dis- 

^Adapted from one devised by Professor H. C. Adams, in an 
economic syllabus for the students of the University of Michigan. 



PRODUCTION AND DISTRIBUTION 



259 





The Workman Has 




Under 


1. Civil rights? 

2. Political 
rights? 

3. Pay, how de- 
termined? 

4. Property in 
product? 


1. What interest 

in quantity of 

work? 
3. What interest 

in quality of 

work? 
3. What care for 

material? 


1. Estimates of 
systems from 
point of view 
of product? 

3. From point of 
view of work- 
er? 


Slavery. 








Serfdom. 








Ordinary 

Wages 
System. 








Piece 

Wages 

System. 








Profit- 
sharing. 








Coopera- 
tion. 








Self-em- 
ployment. 









CO very of his deceit affect the future success of the profit-shar- 
ing enterprise? Why? 

5. If the employees think he is deceiving them while he is 
not, what will be the effect upon the success of the enterprise? 
Why? 

6. What would be the result if the cooperators in a business 
enterprise were not honest with each other? 



260 ELEMENTS OF ECONOMIC THEORY 

7. If they were all honest but suspicious, each of the other, 
and of their managers? 

8. What are some of the requisites of success in profit- 
sharing and codperation? 

9. Show whether or not profit-sharing and cooperative 
enterprises seek the economic welfare of persons not engaged 
in these enterprises. 

10. Show that they may hinder the economic success of 
persons not so united. 

Trade-combi- At Icast two phascs of the present forms of 
Monopolies, largc-scalc production, trade combinations, 
department stores, trusts, monopolies, etc., should be seen by 
every one : first, most of these enterprises have made it pos- 
sible by economies of various kinds — better methods, better 
machinery, mere bulk of business under one management, 
lessening number of men required for a given amount of busi- 
ness, etc. — to produce goods of various kinds more cheaply than 
was possible before. Generally speaking, this result is desir- 
able. What the world needs is more goods per man, not fewer. 
That the per capita production of the means to satisfy human 
want shall increase year by year for all the workers in the 
world is, so far as it goes, greatly to be desired. 

Second, when a given commodity becomes monopolized, 
the managers of the monopoly not only have it in their 
power to produce a given unit of the product with less 
effort per worker, but they also have the power of making 
the article scarce to consumers, and thus raise its value to 
them. How high the value to consumers may be raised by 
keeping the article scarce in the markets depends upon 
the kind of want the commodity is fitted to satisfy and the 
power of consumers to substitute some other commodity for 
it. Monopolists, therefore, have the power to keep the value 
of their product higher than is necessary to give them fair 
returns for their productive effort. How to secure for con- 
sumers in general more of the benefit of cheapened produc- 
tion made possible by combination, rather than how to 



PRODUCTION AND DISTRIBUTION 261 

destroy the combinations themselves, is the problem before a 

truly progressive society. 

Suggestive ^- Suppose a department store does the business 
Questions, ^^j^^t was formerly done by ten separate stores : 

a. How would the ground rent of the one large busi- 
ness compare with the total rents of the ten small 
businesses? Why? 

b. Compare in the same way cubic space needed. 

c. Cost for heating, lighting, etc. 

d. Number of cashiers wanted. 

e. Economies in buying, in transportation, etc. 
/. Stocks of goods necessary to keep on hand. 
g. Wasted time of workers. 

2. What classes of people are harmed by department stores? 

3. Are printers harmed by the introduction of type-setting 
machines? Is society harmed? 

4. What has been the effect of adverse legislation upon 
department stores and machinery? Why? 

5. What has been the effect of similar efforts against the 
consolidation of railways? Why? 

6. What legislation respecting trade combinations is neces- 
sary? Why? 

7. "Which is more important, general welfare, or the wel- 
fare of a small group? 

8. How could corporations, trade combinations, and 
monopolies exist without the making and enforcement of 
laws, contracts, rights of private property, etc.? 

9. Is it unjust for society to claim for general use a share 
of the benefits which persons, both natural and legal, gain 
through the agency of society? Illustrate. 

Labor Organi- ^^^ most commou form of labor organization in 
zations. England and the United States is the trade 
union, which Mr. Sidney Webb defines as follows: "A trade 
union, as we understand the term, is a continuous association 
of wage-earners for the purpose of maintaining or improving 
the conditions of their employment. ' ' There are many points 



262 ELEMENTS OF ECONOMIC THEORY 

of dissimilarity between a trade union and a medieval craft 
gild, of which the former is often thought to be an outgrowth. 
On this point, also, the authority just quoted gives no uncertain 
evidence: "The powers and duties of the medieval gild have, 
in fact, been broken up and dispersed. The friendly society 
and the trade union, the capitalist syndicate and the 
employers' association, the factory inspector and the poor 
law relieving oflBcer, the school board visitor and the muni- 
cipal officers who look after adulteration and inspect our 
weights and measures — all these persons and institutions 
might, with equal justice, be put forward as the successors of 
the craft gild. " ^ 

The trade union consists only of wage-earners, while the 
craft gild was made up of owners of land and capital, man- 
agers, and wage-workers ; the trade union consists of wage- 
earners in the same occupation, not only of one town but of 
many towns, while the typical craft gild was usually confined 
to the industries of a single town; the trade unions have 
gained political power but slowly, while, from the first, mem- 
bers of gilds were influential citizens of their towns and finally 
became politically dominant. 

Within recent years, as the solidarity of the interests of 
great employers has grown greater, there has been a marked 
tendency toward a parallel concentration of labor organiza- 
tions. Illustrations of this tendency are the organizations 
already mentioned: the Knights of Labor, the American 
Federation of Labor, and the American Kailway Union. The 
last of these antagonized the existing trade unions somewhat, 
and has now taken the form of the Social Democracy, a new 
political party. 

One fundamental function of labor organizations has been 
performed in connection with the wage contract. An indi- 
vidual wage-earner is often not the equal of his prospective 
employer in knowledge of the value of his service to produc- 
tion, and is usually unable to withhold his services from con- 

^History of Trade-Unionism, pp. 17, 18. 



PRODUCTION AND DISTRIBUTION 263 

tract very long, because he and his family would then suffer 
from hunger. In knowledge and in power to refrain from 
the bargain, therefore, the single wage-worker is often not the 
equal of a large employer, and may consequently be made to 
accept an unfavorable wage contract. A combination of a 
large number of workers in the occupation may make the 
highest intelligence of any member of the union common 
property, and, by helping each other, they can withhold their 
services from a wage contract for a longer time than is pos- 
sible to a worker acting alone. Thus, by what is called 
collective bargaining, wage-workers have sometimes secured a 
larger share of the total product of an enterprise, and more 
favorable conditions and hours of employment than would 
otherwise have been secured. 

Another very common function in unions is their benefit 
function. By means of accumulated funds, by organization 
for mutual help, and by strengthening the ties of human 
brotherhood between their members, the sick, the unfortunate, 
and the unemployed in trade unions are greatly aided. 

Again, trade unions have been and are highly educational. 
Of English unions it is said: "The student of Democracy is 
always deploring the narrow range of observation and experi- 
ment afforded by the brief histories of the few modern repub- 
lican states. To him, the trade union world offers the 
century -long experience of a thousand self-governing working- 
class communities, with unrestricted capacity for adaptation 
and change. The innumerable variations in the structure of 
these free democracies, the complexities and divergencies of 
their constitutions, their elaborate devices for preserving a due 
balance of power between the executive and the members, the 
relation of their central to their local governments, their 
financial checks and counter checks, their use of the Mass 
Meeting, the Council of Delegates, the Ballot, the Initiative, 
and the Eeferendum, alike in the appointment of officers, 
executive government, the decision of policy, and the enact- 
ment of laws — in short, their prolonged trial of the best- 



264: ELEMENTS OF ECONOMIC THEORY 

known machinery of representative government, and their 
frequent invention of new forms and devices for the better 
administration of their little republics, — all afford unrivalled 
material for generalizations full of significance to the philos- 
opher and to the statesman." ^ If the record of their experi- 
ences is thus valuable to the philosopher and to the 
statesman, it must be clear that to the trade union members 
themselves the same experiences must all along have been 
highly educational. 

In one important particular, however, trade unions have 
been powerless, and must continue so. So long as employers 
can go out of business at will, trade unions can not, by col- 
lective bargaining, continue to secure for wage-workers so 
much of the total value of the product as to leave nothing for 
the manager, the owner of capital, and the owner of land. 
The wages which can be paid permanently in any business 
must always be considerably less than the total value of the 
product. Some wage-workers think the question as to the 
amount of their wages is dependent only upon the employer's 
will. "Within certain limits, this is sometimes true, but, 
generally speaking, unless trade unions can help the business 
enterprises with which they are connected to increase con- 
tinually the total value of the product, there is a maximum 
limit to the wages which the strongest trade union can secure 
for its members. 
The Eio'ht- "^^^ widespread movement for a general eight- 
HourDay.» j^qj^j. (j^y for wage-camers gains much of its 
strength from a growing appreciation by many people of all 
classes that leisure is necessary for men that they may live a 
true human life. We have seen that sunlight and fresh air, 
and the sight of clouds and flowers, of green turf and trees, of 
lake and river and ocean, tend to satisfy real wants of man, 
and, therefore, possess utility for him. The same is true of 
social intercourse with his fellows, of the sight of noble build- 

iWebb and Webb, pp. 475, 476. 

='Rae, Eight Hours for Work— 189i, The Macmillan Co., New York. 



PRODUCTION AND DISTRIBUTION 265 

ings and fine pictures, and of the opportunity to read from 
books, which are now accessible to all through public libraries. 
If a man has no time to appropriate these manifold utilities 
that are within his reach, he fails to have important groups of 
wants satisfied that might be satisfied with no increase in his 
daily wage. Such consumption is of that social sort which, 
by enriching one man's life, does not make another's poorer. 
The eight-hour day movement, therefore, is a concrete expres- 
sion of a growing demand that wage-earners shall have the 
opportunity to enjoy the utilities that are within their grasp. 

We may also look at the movement from the side of produc- 
tion. Most employers at once ask the question — can my em- 
ployees produce as much in eight hours as in ten, or twelve? 
In all businesses where this question can be answered in the 
afiirmative, there can be no valid objection to a reduction in 
hours. In businesses where a negative answer must be given, 
the problem to be solved may be stated in this form : Are the 
various classes of persons concerned willing to sacrifice some- 
thing from the value of their immediate product for the sake 
of being able, with greater leisure, to enjoy more keenly the 
various opportunities for satisfaction which are already pos- 
sible to them? 

In cases where a shorter day results in a lessened product, 
there is also the question of deciding upon whom the loss will 
fall, whether upon all the groups of persons concerned in the 
enterprise in due proportion, or upon some one group unduly. 

From the point of view of both production and consumption 
at once, it may be said that, if a general reduction in the 
hours of work results in a general per capita reduction of the 
value of the product, there must inevitably be less per capita 
to consume. 

American interferences with the trade between 

A Word about . . . . . 

the Tariff citizBus of the United states and the citizens of 

Question. 

other countries have, as we have already seen, a 
long ancestral line in similar restrictions imposed by the colo- 
nies upon intercolonial trade, by Parliament upon English trade 



266 ELEMENTS OF ECONOMIC THEORY 

with the rest of the world, by medieyal towns upon intertown 
trade, and by gilds upon the trade of persons who were not 
gild members. These restrictions upon private trade and 
contract have, at their best, had the sincere motive of seeking 
the welfare of the whole group which imposed them. At 
their worst, they have been intended for the gain of some at 
the expense of others. Even when honestly intended, their 
remote effect upon the general welfare has often and often 
been far different from what was expected. It, therefore, 
seems necessary that every intelligent person should be able to 
answer for himself many questions similar to the following 
before he considers himself well informed upon the tariff ques- 
tion. 

1. What is the necessity at present of any restriction upon 
the international trade of the United States? 

2. Are there any business enterprises which would be 
ruined by a sudden abolition of all tariffs? Why? 

3. What is the precise difference between a tariff for revenue 
and a protective tariff? 

4. How does a protective tariff affect the total production 
of goods in a country which imposes it? 

5. How does it affect the total value of the national 
product? 

6. How does it affect the distribution of the national 
product, or income? 

7. What is the number of persons engaged in industries 
that are protected compared with those engaged in other 
industries? 

8. Are wages in the protected industries high because 
wages in other industries are high, or vice versa, or for neither 
reason? 

9. Would our industries ever have become diversified with- 
out a protective tariff? Give reasons. 

10. Are industries in the newer parts of our own country 
becoming diversified without a protective tariff between 
states? Illustrate. 



PRODUCTION AND DISTRIBUTION 267 

11. Is this argument sound: We are prosperous, we have 
had a protective tariff, therefore our prosperity is due to the 
tariff? Give reasons. 

12. If it is wise to protect some infant industries, must 
they always be protected? "When is the protection to be 
withdrawn? What are the practical difficulties in the way of 
withdrawing such protection? 

13. May a person oppose a tariff for economic reasons, and 
support it for political reasons? Illustrate. 

14. May the converse be true? Illustrate. In these cases 
what will be the resultant opinion? 

15. What is the effect upon business of making the tariff 
question a political issue once in four years? 

16. How can this be avoided? 

17. Are the economic policies of other countries subject to 
such political changes as are frequent in the United States? 
Give illustrations. 

18. Does a tariff give a country an increasing, or even a 
steady, revenue in times of war and emergency? Why? 

19. Do men pay tariff dues in proportion to their ability to 
pay? Illustrate. 

20. Is the tariff question a simple one? Give reasons. 

21. Is political economy mainly a study of the tariff ques- 
tion? Explain. 

22. Show that the immediate and remote results of a tariff 
bill are not always equally beneficial. Illustrate. 

23. What are the expenses of collecting tariff duties in 
proportion to the revenues obtained? Why? 

Direct compui- Important as the question of the tariff is to the 
tio7s for siicik'i P^^^P^^ 0^ *^6 United States, both from the 
Purposes, point of view of taxation and because of the 
effects of various tariff measures upon politics and business 
interests, the so-called direct taxes of states, cities, counties, 
towns, villages, school districts, park districts, sanitary dis- 
tricts, etc., are much more important to the ordinary citizen. 
For example, the average annual per capita amount of the duties 



268 ELEMENTS OF ECONOMIC THEORY 

on imports, from 1884 to 1893 inclusive, was $3.35. The 
school tax alone in many local districts often far exceeds this 
figure, and the total of local taxes per capita is sometimes several 
times this amount.^ Especially is tliis true if to taxes proper 
be added what are called by writers on finance, fees and 
special assessments. The total annual public expenditure of 
some cities reaches at times fifteen and even twenty dollars 
per capita. These three contributions, taxes, fees, and special 
assessments, are all compulsory under certain circumstances, 
and are collected by direct authority from the taxing power 
— local, state, or national. Professor Seligman defines them 
as follows : 

"A fee is a compulsory contribution to defray the total or 
partial cost of each recurring service undertaken by the 
government in the public interest, but conferring a special 
advantage on the fee -payer. 

"A special assessment is a compulsory contribution paid 
once and for all to defray the cost of a specific improvement 
to property undertaken in the public interest, and levied by 
the government in proportion to the special benefits accruing 
to the property owner. 

"A tax is a compulsory contribution from the individual or 
association to cover the expenses incurred by the government 
in the common interest, without reference to special benefits 
conferred."^ 

Postage paid to the national government, expenses for 
articles of incorporation and charters paid to state govern- 
ments, and water taxes paid to villages and cities that own 

'According to the eleventh census of the United States, expenses 
of national, state, and local governments for a year were as follows : 

National Government $352,000,000 

States and Territories 77,000,000 

Local Bodies 486,000,000 

Total - - 1915,000,000 
^Classification of Public Revenues — "Quarterly Journal of Eco- 
nomics," April, 1893, p. 321. 



PRODUCTION AND DISTRIBUTTON 269 

their own water systems, are examples of fees as above 
defined. So far as such charges are in excess of the costs of 
the various services rendered, such payments become taxes. 

Sidewalks, pavements, and sewers in villages and cities are 
usually constructed by special assessments upon the owners of 
adjacent real estate. Here again, if the sum collected is in 
excess of the cost of the improvement, and the excess is not 
rebated, it may become a tax. 

Taxes are justified because social beings cannot live 
together without social consumption. How much social 
consumption there shall be is determined, in a democratic 
country, by the voters. So long as individuals control pro- 
duction of goods, there can not be social consumption without 
contributions of goods by individuals. As the benefits con- 
ferred upon the individual by organized society are invaluable 
to him, he can not pay for them even by giving all he has. 
Still, the functions of government, as at present exercised, 
can be maintained at a less expenditure than the total of 
the individual incomes, and, therefore, the only logical 
basis for payment of taxes is that each should pay in pro- 
portion to his ability to pay. If one goes farther than 
this, and tries to specify the exact rates and methods of 
taxation which will make each citizen pay in proportion 
to his ability to pay, the task attempted is one for the wisest 
statesmen and students of finance. Both in self-defense 
and because of the possible good to be done to society as 
a citizen and voter, the subject of taxation is worthy of pro- 
longed study. 

Suggestive ^- What should be the amount of fees and 

Questions, special asscssmcnts in comparison with the value 
of the services rendered and benefits conferred? Why? 

2. When street car lines, gas works, and water systems are 
owned by private persons, or corporations, and city councils 
fix the prices at which the public is to be served, should the 
rate be higher than required by the service rendered, and the 
excess paid into the city treasury? Why? 



270 ELEMENTS OF ECONOMIC THEORY 

3. In comparison with the national tariff dues, is the differ- 
ence of one cent a ride on the street cars of greater or less 
importance to the ordinary wage-earner? Give reasons. 

4. When should public property be exempt from taxation? 

5. When should church property and the property of pri- 
vate charitable institutions be exempt? 

6. If one man owns property worth $100,000, and another 
owns property worth $1,000, will the same rate of tax upon 
each dollar of property make each man pay in proportion to 
his ability? Why? 

7. Should men pay school taxes in proportion to the num- 
ber of children they have? Why? 

8. What are the difficulties in taxing personal property? 

9. What is an income tax? 

10. Show how taxation sometimes leads to bribe-giving and 
bribe-taking? 

11. What other sources of revenue, if any, than by deduct- 
ing something from the total product of individual producers, 
do governments have? 

13. Should government funds be expended for faithful 
services and good qualities of commodities at higher rates 
than are paid for these goods by private consumers? Why? 

13. Why do men seek so earnestly for government posi- 
tions? 

14. In the present state of efficiency and honesty in the 
administration of various political units, should governments 
undertake more or fewer functions? Why? 

15. Do added responsibility and accountability ever develop 
greater honesty and efficiency? Explain. 

16. Should the owner of a mortgaged farm pay taxes on the 
whole value of the farm? Why? 

17. Should the holder of the mortgage pay a tax on the 
mortgage? 

18. Should a corporation pay taxes on both its stock and 
bonds? Why? 

19. Should bondholders pay taxes on their bonds? 



PRODUCTION AND DISTRIBUTION 371 

20. Should a man know from year to year about what his 
taxes will be? Why? 

21. Should he know when they must be paid? 

22. Does it make any difference to him what time of the 
year they must be paid? Why? 

23. If a man refuses to pay his taxes what happens? Why? 

24. Why can a nation demand the lives of its citizens to 
save the nation from invasion? 

25. How much of a man's income and property may be 
taken in taxes? Why? 

26. What is an inheritance tax? 

27. What is a progressive tax? 

28. Should an inheritance tax be progressive? Why? 



372 ELEMENTS OF ECONOMIC THEORY 



Chapter V 



CONSUMPTION 



Kinds of Consumption in economics means primarily 
Consumption, destruction of utility. It is the opposite of 
production. Consumption may be wasteful, as when utilities 
are destroyed by a conflagration. It may be productive, as 
in the case of raw materials which lose their utility as raw 
materials in order to receive greater utility in a finished 
product, when it is really a form of production. Finally, 
utilities may be appropriated to satisfy the wants of men. 
This is consumption proper. When the word consump- 
tion is used without explanation, we mean this last form 
of it. To obtain the means wherewith to satisfy his 
wants and the wants of others, man puts forth all his efforts. 
When utilities are destroyed in satisfying human wants, the 
purpose of their creation is fulfilled. Man is the beginning 
and the end of the economic process. That man may have a 
more abundant life, the whole complex machinery of modern 
industrial society has been evolved and set in motion. What 
man primarily wants is his dinner, not merely the cookstove 
on which it was prepared; clothing, not the spindles and 
looms on which the cloth was spun and woven; pictures 
and symphonies, not the paint brushes and musical instru- 
ments by which they are produced. Other things being 
equal, the world welfare, therefore, varies with the per capita 
amount of consumption goods. From the economic stand- 
point, a man's life is more abundant the more various and 
the better adjusted the consumption goods he enjoys. 

A Penn From this point of view, the proverb, "A penny 

Saved. saved is a penny earned," may acquire new 

meaning. To produce consumption goods and then have man 



CONSUMPTION 273 

consume them in such a way as to give him no rational enjoy- 
ment, leaves human want just as unsatisfied as before. To 
destroy them outright brings the same result. But to save 
from pure waste, or unsatisfactory consumption, to man's 
rational enjoyment a utility already in existence is as much 
worth while as to produce another like it for the same high 
purpose. 

Goods to the value of more than $100,000,000 are annually 
destroyed by fire in the United States. By means of fire 
insurance companies, this loss is so distributed that the indi- 
vidual owners are not impoverished, but this ought not to 
disguise the fact that the people have annually just this much 
less satisfaction of want because of such destruction. 

The wastes of each household, because of tlu-owing away 
half-consumed utilities, cooking which does not bring out 
nutritive qualities, unwise selection of materials, etc., make 
an enormous aggregate in this country. A better knowledge 
of the nutritive qualities of foods and more skill in cooking 
may, therefore, make the incomes of the American people 
result in far greater welfare than at present, even if their 
incomes be not increased. To have some real part, even in 
one family, in preventing waste and unwise use of the con- 
sumption utilities actually produced is, therefore, an economic 
service of great dignity. 
Consumption Skilful men often get an article produced which 
as Demand, ^j^g public had not bcforc known, and, there- 
fore, had never consumed, but which, once made, they feel a 
need for and consume freely. Still, it is also true that the 
articles men consume determine very largely the articles that 
are made, and, to a great degree, the conditions under which 
they are made. We are familiar with this truth when used 
by opponents of prohibitory liquor legislation. If men cease 
to drink alcoholic drinks, they will no longer be compounded. 
This truth can not be covered up by retorting that liquors can 
not be drunk if no one makes them. Both facts should be 
kept in mind. Utilities face both toward production, and 



274 ELEMENTS OF ECONOMIC THEORY 

toward consumption. Production and consumption react on 
each other, stimulating and retarding each other, through 
utility. Neither can long exist without the other. 

Consumers' -^^^ji'^^g upon tliis power of consumption to 
Leagues.' influence even the conditions of production, 
large numbers of consumers, especially in large cities, are 
forming themselves into leagues for the purpose of discour- 
aging the purchase of any article which is made in unsanitary 
buildings or the makers and sellers of which are inadequately 
paid. These leagues rely, in the main, upon two methods: 
fii'st, they make "White Lists" of such manufacturers and 
storekeepers as come up to their standard of a "fair house." 
Second, they put a brand, or seal, of some kind upon all arti- 
cles that are known to be made and sold under humane and 
healthful conditions, and consumers are thus enabled to avoid 
other articles. If a sufficient number of consumers can be 
induced to act in this way, it is evident that finally articles 
made and offered for sale under improper conditions will lack 
sale. 

Social Con- ^^^ ^^^J ^^ '^^ possiblo for cacli consumer to 
sumption, prevcut absolutc waste, to choose between a 
utility which debases his manhood and one which ennobles, 
and to help to make the conditions under which others produce 
and sell more helpful to them, but there is yet another way to 
make the goods already produced contribute more to the 
welfare of mankind than is yet common. Many goods are 
relatively permanent, and continue to satisfy want until finally 
destroyed by the tooth of time. Of such a nature are fine 
buildings, statuary, paintings, and, to a less degree, books. 
Still other goods are so renewed from year to year as to be 
permanent and often of growing utility. Of such a nature 
are parks, beautiful drives, avenues of trees, the sight of 
waterfalls and beautiful landscapes. Such utilities may be 
consumed by the owner, in selfish isolation from his fellows, or 

^Kelly, Aims and Principles of the Consumers' League — "The 
American Journal of Sociology," November, 1899. 



CONSUMPTION 376 

with infinitely greater satisfaction in company with them. 
"As things are, the first impulse of the man who becomes 
rich is to hedge himself away from his fellows ; to put up 
barbed wire around his belongings ; to travel by a separate 
class; and, generally, to hang out the sign, 'Trespassers 
beware' — not from the admirable motive of being alone with 
nature, but simply that of being distinguished from the 
crowd. . . . We have the common phenomenon in the 
neighborhood of our cities, of owners building walls around 
thousands of acres, with the intention of preventing the pub- 
lic from enjoying what surely belongs to no private owner, the 
sight of God's Earth. "1 

Contrasted with this kind of consumption, we have that of 
others who, by means of their open picture galleries, free 
libraries, unfenced lawns and parks, interchange of services 
in social settlements, disinterested public services, and social 
consumption in many other ways, are demonstrating that the 
goods we now have might contribute to the wants of a larger 
number of men than at present enjoy them. 

saegestive ■"•• ^ow is it possiblc for a person or family to 
Questions. \)q ^qq "saving," to starvc the life of to-day in 
order to lay up too many goods for the future? 

2. May a nation consume too little of its income from day 
to day and invest more in factories, railways, machinery, etc., 
than can be kept at work? Explain. 

3. Give illustrations of the effect of consumption upon 
production and distribution. 

4. Give illustrations of social consumption in your own 
town or city, 

5. Show in what directions it may be increased. 

6. Make out a set of rules to guide a person in his expendi- 
ture, having in mind some such possibilities of choice as the 
following: 

^Smart, Studies in Economics, pp. 305-307 — 1895, The Macmillan 
Co., New York. 



276 ELEMENTS OF ECONOMIC THEORY 

a. Between satisfying a want for something harmful 
and something helpful to manhood, 

b. Between satisfying a want for something helpful 
and something more helpful to manhood. 

c. Between satisfying wants by selfish consumption 
and social consumption. 

d. Between saving and consumption enough to 
develop normal men and women. 

e. Between extravagant consumption by a few and 
moderate consumption by many. 

7. Write a letter of advice to young men and women, set- 
ting forth the conditions under which they may be reasonably 
sure of producing goods of such value to society that they can 
get goods enough in return to secure for them a life of decent 
comfort. 

a. What kind of efficiency should they seek to 
acquire? 

b. Should they seek an occupation that is already 
crowded? Why? 

c. Suppose all occupations are crowded, what are 
they to seek to do? 

CONCLUSION- 

1. Look up the list of questions asked by members of the 
class as suggested in Lesson XVII, Part I. 

2. Answer for yourself every one that you can. 

3. Make a new and consecutive list of all the questions you 
can not answer. 

4. Add to the list other important questions which have 
been raised during your study of economics but not answered 
to your satisfaction. 

5. Keep this list of questions in some convenient place, and 
look at it from time to time, as the months go by, whatever 
your station in life. 

6. Cross off such questions as time and further study enable 
you to answer. 



CONSUMPTION 277 

7. Add to the list such new questions as time and wider 
experience compel you to ask. 

8. Keep on with the study of some particular questions in 
which you are especially interested. 



APPENDIX 



The following tables of statistics are inserted for two 
reasons: first, because they throw some light upon one or 
more of the topics discussed in the text ; second, because they 
furnish data for further exercises in graphic statement. Full 
scope may thus be given to the ingenuity of pupils in devising 
the best methods of representing statistical facts by curves, 
bars, masses of color, circles, etc. The special talent of cer- 
tain pupils, in this kind of work, may often contribute much 
to the good of all. Some of the statistics may also be dia- 
grammed by each pupil with profit. 

Additional statistics of great variety may easily be obtained 
by reference to the Statistical Abstract^ and to the authorities 
suggested in the note at the beginning of Part III. 

Yearly Cotton Product ^ of the United States. ^ 



Year. 


Bales. 


Year. 


Bales. 


Year. 


Bales. 


1841 


1,688,675 


1860 


3,826,086 


1879 


5,057,397 


1843 


2,394,203 


1861 


No report 


1880 


5,789,329 


1843 


2,108,579 


1862 


No report 


1881 


5,435,845 


1844 


2,484,662 


1863 


No report 


1882 


6,992,334 


1845 


2,170,537 


1864 


No report 


1883 


5,714,053 


1846 


1,860,479 


1865 


2,228,987 


1884 


5,669,021 


1847 


2,424,113 


1866 


2,059,271 


1885 


6,550,215 


1848 


2,808,596 


1867 


2,498,895 


1886 


6,513,623 


1849 


2,071,706 


1868 


2,439,039 


1887 


7,017,704 


1850 


2,415,257 


1869 


3,154,946 


1888 


6,935,033 


1851 


3,090,029 


1870 


4,352,317 


1889 


7,313,726 


1852 


3,352,882 


1871 


2,974,851 


1890 


8,655,000 


1853 


3,035,027 


1872 


3,930,508 


1891.... . 


9,035,000 


1854 


2,932,339 


1873 


4,170,388 


1892 


6,700,000 


1855 


3,645,345 


1874 


3,833,991 


1893 


7,534,735 


1856 


3,056,519 


1875 


4,669,288 


1894 


9,900,000 


1857 


3,238,902 


1876 


4,485,423 


1895 


7,157,346 


1858 


3,994,481 


1877 


4,811,265 


n896 


8,757,964 


1859 


4,823,770 


1878 


4,073,534 


'1897 


11,199,994 



'Year ending September 1. 

^Manual of Statistics and Stock Exchange Handbook for 1891 
p. 418— Charles H. Nicoll, New York. 
8The same, for 1899, p. 496. 

279 



280 



APPENDIX 



Pig Iron Production of the United States.^ 



Year. 


Tons. 


Year. 


Tons. 


Year. 


Tons. 


*1854 


736,218 


1869 


1,916,641 


1884 


4,097,868 


1855 


784,178 


1870 


1,865,000 


1885 


4,044,526 


1856 


883,137 


1871 


1,911,608 


1886 


5,683,329 


1857 


798,157 


1872 


2,854,558 


1887 


6,417,148 


1858 


705,094 


"1873 


2,560,963 


1888 


6,489,738 


1859 


840,627 


1874 


2,401,262 


1889 


7,603,642 


1860 


919,770 


1875 


2,023,733 


1890 


9,203,703 


1861 


731,544 


1876 


1,868,961 


1891 


8,279,870 


1862 


787,662 


1877 


2,066,594 


1892 


9,157,000 


1863 


947,604 


1878 


2,301,215 


1893 


7,124,000 


1864 


1,135,996 


1879 


2,741,853 


1894 


6,657,088 


1865 


931,582 


1880 


3,835,151 


1895 


9,446,308 


1866 


1,350,344 


1881 


4,144,254 


1896 


8,623,127 


1867 


1,461,626 


1882 


4,123,323 


♦1897 


9,652,860 


1868 


1,603,000 


1888 


4,593,510 


n898 


11,773,934 



^Marrnal of Statistics for 1S97, p. 398. 
*1854 to 1872, net tons. 



"1873 to 1898. gross tons. 

*Manual of Statistics for 1897,;p. 451. 



Freight Rates on Wheat, by Lake, Canal, and Rail, from 
Chicago to New York, 1857-1898 ^ 





Average Kates per Bushel | 


Calendar 
Year. 


Average Kates per Bushel. 


Calendar 
Year. 


By Lake 
and 


By Lake 
and 


By All 


By I>ake 
and 


By Lake 
and 


By AH 




Canal.' 


Rail. 


Kail. 




Canal.= 


Kail. 


Rail. 




Cents. 


Cents. 


Cents. 




Cents. 


Cents. 


Cents. 


1857 


25.29 






1878 


9.15 


11.4 


17.7 


1858 


16.28 
17.59 






1879 

1880 


11.60 

12.27 


13.3 

15.7 


17 3 


1859 






19.9 


I860 


24.83 
26.55 
26.33 
22.91 
28.36 
26 62 
29.61 
22.36 
22.79 






1881 

1882 

1883 

1884 

1885 

1886 

1887 

1888 

1889 


8.19 
7.89 
8.37 
6.31 
5.87 
8.71 
8.51 
5.93 
6.89 


10.4 

10.9 

11.5 
9.95 
9.02 

12 

12 

11 

«8.7 


14 4 


1861 






14 6 


1862 . .. 






16 5 


1863 . .. 






13 125 


1864 . .. 






14 


1865 .... 






16 5 


1866 






»15 74 


1867 






814 5 


1868 


29 


42.6 


15 


1869 


25.12 


25 


35.1 


1890 


5.85 


8.5 


14.31 


1870 


17.11 


22 


33.3 


1891 


5 96 


8.53 


15 


1871 


20.24 


25 


31 


1892 


5.61 


7.55 


14.23 


1872 


24.47 


28 


33.5 


1893 


6,33 


8.44 


14.7 


1873 


19.19 


26.9 


33 2 


1894 


4.44 


7 


12.88 


1874 


14.1 


16.9 


28.7 


1895 


4.11 


6 95 


12.17 


1875 


11.43 


14.6 


24.1 


1896 


5.38 


7.32 


12. 


1876 


9.58 


11.8 


16.5 


1897 


4.35 


7.37 


12.32 


1877 


11.24 


15.8 


20.3 


1898 


4.42 


9.50 


11.55 



• Prepared by J. C. Brown, Statistician, Wew York Produce Exchange. Quoted lu 
98 Statistical Abstract, p. 359. 
» Including canal tolls until 1882. but not Buffalo transfer charges. 
"Averages of offlcially published tariffs; actual rates lower. 



APPENDIX 



281 



Prices of Pig Iron, Rolled Bar Iron, Iron and Steel Rails, 
PER Ton, and of Cut Nails, per Keg of 100 Lbs.^ 



Calendar 
Year. 


Pig Iron, 

No. 1 

Anthracite 

Foundry.' 


Bar Iron, 

Best 

Eolled.'' 


Iron Eails, 
Standard 
Sections.^ 


Steel 
Kails. ^ 


Cut 

Nails.* 


wire 

Nails. 


1850 


$20.88 


$59.54 


147.88 


■-*3tr 


$3.71 




1851 


21.38 


54.66 


45.63 


goo 


3.28 




1852 


22.63 


58.79 


48.38 


S '^ 


3.13 




1853 


36.12 


83.50 


77.25 


.ft 


4.85 




1854 


36.88 


91.33 


80.13 


03 02 


4.76 




1855 


27.75 


74.58 


62.88 


o S 


4.10 




1856 


27.12 


73.75 


64.38 


3.92 




1857 


26.38 


71.04 


64.25 


3.72 


00 


1858 


22.25 


62.29 


50.00 


3.53 


1-t 


1859 


23.38 


60.00 


49.38 




3.86 


£ 


1860 


22.75 


58.75 


48.00 


3.13 


^ 


1861 


20.25 


60.83 


42.38 


-§2 

2^ 


2.75 


(U 


1862 


23.88 


70.42 


41.75 


3.47 




1863 


35.25 


91.04 


76.88 


Sa 


5.13 


<o 


1864 


59.25 


146.46 


126.00 


+3-.-1 


7.85 


+s 


1865 


46.12 


106.38 


98.63 


.a ® 


7.08 




1866 


46.88 


98.13 


86.75 


fa-S 


6.97 




1867 


44.12 


87.08 


83.13 


$166.00 


5.92 


o^ 


1868 


39.25 


85.63 


78.88 


158.50 


5.17 


is 


1869 


40.63 


81.66 


77.25 


132.25 


4.87 


1870 


33.25 


78.96 


72.25 


106.75 


4.40 


u 


1871 


35.12 


78.54 


70.38 


102.50 


4.52 


a 


1872 


48.88 


97.63 


85.13 


112.00 


5.46 


a 


1873 


42.75 


86.43 


76.67 


120.50 


4.90 


8 


1874 


30.25 


67.95 


58.75 


94.25 


3.99 


•i-i 


1875... 


25.50 


60.85 


47.75 


68.75 


3.42 


1876 


22.25 


52.08 


41.25 


59.25 


2.98 


© 


1877 


18.88 


45,55 


35.25 


45.50 


2.57 


d 


1878 


17.63 


44.24 


33.75 


42.25 


2.31 


a 


1879 


21.50 


51.85 


41.25 


48.25 


2.69 


-t^ 


1880 


28.50 


60.38 


49.25 


67.50 


3.68 


iz; 


1881 


25.12 


58.05 


47.13 


61.13 


3.09 




1882 


25.75 


61.41 


45.50 


48.50 


3.47 




1883 


22.38 


50.30 


C3 '"3 


37.75 


3.06 




1884 


19.88 


44.05 


30.75 


2.39 




1885 


18.00 


40.32 




28.50 


2.33 




1886 


18.71 


43.12 


iD^ 


34.50 


2.27 




1887 


20.92 


49.37 


-U <V 


37.08 


2.30 


$3.15 


1888 


18.88 


44.99 




29.83 


2.03 


2.55 


1889 


17.75 


43.40 


29.25 


2.00 


2.49 


1890 


18.40 


45.92 


ID (E 


31.75 


2.00 


2.51 


1891 


17.52 


42.56 


Q 


29.92 


1.86 


2.05 


1892 


15.75 


41.89 


u o 


30.00 


1.83 


1.70 


1893.. 


14.52 


38 08 


a<S 


28.12 


n.44 


1.49 


1894 


12.66 


29 96 


w 


24.00 


n.os 


1.11 



iFurnished by the American Iron and Steel Association, Statistical Abstract, 1S94, 
p. 412. 'At Philadelphia. 

3 At mills in Pennsylvania. * Wholesale store prices at Philadelphia. 

'Prices based on a new classification adopted In 1893, the base price and schedule of 
extras being changed to correspond with the wire nail schedule. 



283 



APPENDIX 



GOLD AND SILVER. 
World's Product of Gold and Silver.' 



Calendar Year. 


Gold. 


Silver 
(Coining Value). 


Per Cent 
Gold. 


Per Cent 
Silver. 


14922-1520 


$107,931,000 
114,205,000 
90,492,000 
90,917,000 
98,095,000 
113,248,000 
110,324,000 
116,571,000 
123,084,000 
143,088,000 
170,403,000 
253,611,000 
827,116,000 
275,211,000 
236,464,000 
118,152,000 
76,063,000 
94,479,000 
134,841,000 
363,928,000 
662,566,000 
670,415.000 
614,944,000 
648,071,000 
577,883,000 
572,931,000 
495,582,000 
106,163,900 
105,774,900 
110,196,900 
123,489,200 
118,848,700 
130,650,000 
146,651,500 
157,494,800 
180,567,800 
200,406,000 


$ 54,703,000 
98,986,000 
207,240,000 
248,990,000 
348,254,000 
351,579,000 
327,221,000 
304,525,000 
280,166,000 
284,240,000 
295,629,000 
358,480,000 
443,232,000 
542,658,000 
730,810,000 
371,677,000 
224,780,000 
191,444,000 
247,930,000 
324,400,000 
184,169,000 
188,092,000 
228,861,000 
278,313,000 
409,322,000 
509,256,000 
594,773,000 
120,626,800 
124,281,000 
140,706,400 
155,427,700 
163,032,000 
177,352,300 
198,014,400 
213,944,400 
212,829,600 
217,610,800 


66.4 
55.9 
30.4 
26.7 
22.0 
24.4 
25.2 
27.7 
30.5 
33.5 
36.6 
41.4 
42.5 
33.7 
24.4 
24.1 
25.3 
33.0 
35.2 
52.9 
78.3 
78.1 
72.9 
70.0 
58.5 
53.0 
45.5 
46.8 
45.9 
43.9 
44.3 
42.1 
42.4 
42.5 
42.4 
46.3 
47.7 


S3 fi 


1521-1544 


44 1 


1545-1560 


69 6 


1561-1580 


73 3 


1581-1600 


78 


1601-1620 


75 6 


1621-1640 


74 8 


1641-1660 


72 3 


1661-1680 


69 5 


1681-1700 


66 5 


1701-1720 


63 4 


1721-1740 


58 6 


1741-1760 


57 5 


1761-1780 


66 3 


1781-1800 


75 6 


1801-1810 


75 9 


1811-1820 


74 7 


1821-1830 


67 


1831-1840 


64 8 


1841-1850 


47 1 


1851-1855 


21 7 


1856-1860 


21 9 


1861-1865 


27 1 


1866-1870 


30.0 


1871-1875 


41 5 


1876-1880 


47.0 


1881-1885 


54.5 


1886 


53.2 


1887 


54.1 


1888 


56.1 


1889 


55.7 


1890 


57.9 


1891 


57.6 


1892 

1893 


57.5 
57.6 


1894 


53.7 


1895 


52.3 






Total 


8,781,858,700 


10,344,561,400 


[At.] 45.9 


[At.] 54.1 





'Report of the Director of the Mint, for 1896, pp. 232, 233. 

^The estimates from 1492 to 1885 are from a table of averages for 
certain periods compiled by Dr. Adolph Soetbeer. For the years 
1886 to 1895, the production is the annual estimate of the bureau of 
the mint. 



APPENDIX 



283 



From the Report of the Director of the Mint for 1898, pp. 272, 
273, these additional figures are taken : 



Calendar Year. 


Gold. 


Silver. 


Per Cent 
Gold. 


Per Cent 
Silver. 


1896 


202,682,300 
237,504,800 


217,442,900 
236,730,300 


48.2 
50 


51.8 


1897 


50 







Freight Rates on Grain and Flour from St. Louis, to Vari- 
ous Points During Each Year, from 1877 to 1898.* 





To New Orleans by 
Eiver, 


To New York by 
Bail. 


To Liverpool. 


Calendar 
Year. 


100 lbs. 
Grain in 
Sacks. , 


Wheat in 

Bulk by 

Barge, 

per Bushel. 


"Wheat 

per 
100 lbs. 


Flour 
per Barrel. 


Via New 

Orleans, 

Wlieat, 

per Bushel 


Via New 

York. 

Wheat, 

per Bushel. 


1877 


Cents. 

21 

17.5 

18 

19 

20 

20 

17.75 

14. 

15 

16 

18 

15 

17.93 

15.66 

16.28 

16.87 

17.54 

17.14 

13 

14.54 

10.83 

10 


Cents. 
8.5 
7.25 
7.75 
8.25 
6 

6.42 
5.5 
6.63 
6.4 
6.5 
6.5 
6.5 
5.95 
6.58 
6.88 
6.50 
6.55 
5.89 
5.95 
5 

4.88 
4.50 


Cents. 
41 
38 
33.5 
42 
32 
29.5 
33 
26 

22.14 
29 

32.13 
29.5 
28.5 
27.63 
29 

26.62 
28.5 
24.73 
^23. 57 
23 

23.64 
22.25 


Cents. 

82 

76 

67 

84 

64 

59 

66 

52 

44.29 

58 

64.25 

59 

58 

52.63 

58 

58 

57 

50 

47 

46 

47.26 

45.10 


Cents. 


Cents. 


1878 






1879 






1880 






1881 






1882 

1883 

1884 

1885 

1886 

1887 

1888 

1889 

1890 

1891 

1892 

1893 

1894 

1895 

1896 

1897 

1898 


22.66 

19.58 

14.58 

15.11 

16.17 

14.8 

15.17 

17.33 

14.33 

15.75 

14 

14.71 

11.69 

12.13 

13.50 

12.89 

14.19 


23.66 

27 

21.25 

20.5 

24 

24.8 

22.95 

24.97 

21.48 

23.55 

21 

21.72 

18.71 

18.33 

19. 67 J 

20.33 

20.32 



'Prepared by Mr. George H. Morgan, Secretary Merchants' Ex- 
change, St. Louis, Missouri, and quoted in 1898 Statistical Abstract, 
p. 360. 

^Published rates since 1894. 



284 



APPENDIX 



UNITED STATES ANTHRACITE COAL STATISTICS. ^ 

The Quantity of Anthracite Coal Sent to Market from the 
Beginning* (of Mining) to the End of 1898. 



Year, 

1820 

1821 

1822 

1823 

1824 

1825 

1826 

1827 

1828 

1829 

1830 

1831 

1832 

1833 

1834 

1835 

1836 

1837 

1838 

1839 

1840 

1841 

1842 

1843 

1844 

1845 

1846 

1847 

1848 

1849 

1850 

1851 

1852 

1853 

1854 

1855 

1856 

1857 

1858 

1859 



Tons. 



365 

1,073 

2.240 

5.823 

9,541 

34,893 

48,047 

63,434 

77,516 

112,083 

174,734 

176,820 

363,871 

487,748 

376,636 

560,758 

682,428 

881,476 

739,293 

819,327 

865,414 

958,899 

1,108,001 

1,263,539 

1,631,669 

2,023,052 

2,343,992 

2,982,303 

3,089,238 

3,242,541 

3,254,321 

4,377,130 

4,925,695 

5,114,491 

5,753,369 

6,552,301 

6,751,542 

6,420,342 

6,491,187 

7,517,516 



Year. 

1860 

1861 

1862 

1863 

1864 

1865 

1866 

1867 

1868 

1869 

1870 

1871 

1872 

1873 

1874 

1875 :. 

1876 

1877 

1878 

1879 

1880 

1881 

1882 

1883 

1884 

1885 

1886 

1887 

1888 

1889 

1890 

1891 

1892 

1893 

1894 

1895 

1896 

'1897 

•1898 



^The Manual of Statistics for 1897, p. 397. 

'Shipments commenced from the Lehigh region in 1820; the 
Schuylkill region in 1825; the Lackawanna region in 1829; the 
Pittston or Upper Lackawanna region in 1850, and the Scrantou 
region in 1856. 

''Manual of Statistics for 1899, p. 449. 



APPENDIX 



286 



Highest and Lowest Prices (New York) of Crude Oil, per 
Barrel, in Each Year.* 



High Month. 



January ... 
October .... 
December 

July 

January ... 
January . . . 
September 

July 

January ... 
January ... 

Jvme 

June 

January ... 

April 

April 

December 
January ... 
February . . 
December , 

June 

September 
November. 

June 

January ... 
October .... 
January ... 
December 

March 

November. 
February... 
February... 
January.... 
December 
December 

April 

January.... 



High 
Price. 



$1.75 
3.00 
4.00 
14.00 
10.00 
5.00 
4.00 
5.50 
7.00 
4.90 
5.15 
4.10 
3.05 
1.90 
1.65 
4.231 
5.70 
1.86S 
1.284 
1.241 
l.Oli 
1.36 
1.24 
1.151 
1.12^ 
.92i 
.904 
1.00 
1.121 
1.08 
.81 
.64i 
• 79^ 
.95| 
2.50 
1.50i 



Low Month. 



November. 
January.... 
January,... 
February... 

August 

December . 

June 

January.... 
December . 

August 

January.... 
September 
December . 
December . 
January... 
January.... 

June 

September. 

June 

April 

July 

July 

January.... 

June 

January.... 
August.... = 

July 

June 

April 

December . 
August .... 
October .... 
January.... 
January.... 
January.... 
December . 



Low 
Price. 



$0.05 
.10 
2.00 
3.75 
4.00 
1.65 
1.50 
1.80 
4.25 
2.75 
3.40 
3.00 
1.00 
.45 
.90 
1.481 
1.53a 
.784 
.634 
.701 
.724 
.494 
.831 
.511 
.68 
.59f 
.54^ 
.71? 
.80 
.601 
.5l| 
.50 
.53 
.79 
.95 
.90 



$0.52 

1.00 

3.11 

7.85 

6.65 

3.76 

2.40 

3.57 

5.64 

3.86 

4.42 

3.68 

1.84 

1.17 

1.33 

2.61 

2.37 

1.17 
.86 
.95 
.85 
.79 

1.06 
.84 
.884 
.711 
.621 
.87i 
.944 
.844 
.66i 
.57^ 
M\ 
.871 

1.36 

1.201 



^Manual of Statistics for 1897, p. 412. 



286 



APPENDIX 



Commercial Ratio of Silver to Gold Each Year Since 1687.^ 



Year. 


Katio. 


Year. 


Ratio. 


Year. 


Eatio. 


Year. 


Eatlo 


lYear. Ratio. 


1687' .. 


14.94 


1730.. 


14.81 


1773.. 


14.62 


1815.. 


15.26 


1857.. 


15.27 


1688... 


14.94 


1731.. 


14.94 


1774.. 


14.62 


1816.. 


15.28 


1858.. 


15.38 


1689... 


15.02 


1732.. 


15.09 


1775.. 


14.72 


1817.. 


15.11 


1589.. 


15.19 


1690... 


15.02 


1733.. 


15.18 


1776.. 


14.55 


1818.. 


15.35 


I860.. 


15.29 


1691... 


14.98 


1734.. 


15.39 


1777.. 


14.54 


1819.. 


15.83 


1861.. 


15.50 


1693... 


14.92 


1735.. 


15.41 


1778.. 


14.68 


1820.. 


15.62 


1862.. 


15.35 


1693... 


14.83 


1736.. 


15.18 


1779.. 


14.80 


1821.. 


15.95 


1863.. 


15.87 


1694... 


14.87 


1737.. 


15.02 


1780.. 


14.72 


1822.. 


15.80 


1864.. 


15.37 


1695... 


15.02 


1738.. 


14.91 


1781.. 


14.78 


1823.. 


15.84 


1865. 


15.44 


1696... 


15.00 


1739.. 


14.91 


1782.. 


14.42 


1824.. 


15.82 


1866.. 


15.43 


1697... 


15.20 


1740.. 


14.94 


1783.. 


14.48 


1825.. 


15.70 


1867.. 


15.57 


1698... 


15.07 


1741.. 


14.92 


1784.. 


14.70 


1826.. 


15.76 


1868.. 


15.59 


1699... 


14.94 


1742.. 


14.85 


1785.. 


14.92 


1827.. 


15.74 


1869.. 


15.60 


1700... 


14.81 


1743.. 


14.85 


1786.. 


14.96 


1828.. 


15.78 


1870.. 


15.57 


1701... 


15.07 


1744.. 


14.87 


1787.. 


14.92 


1829.. 


15.78 


1871. 


15.57 


1702... 


15.52 


1745.. 


14.98 


1788.. 


14.65 


1830.. 


15.82 


1872.. 


15.63 


1703... 


15.17 


1746.. 


15.13 


1789.. 


14.75 


1831.. 


15.72 


1873.. 


15.92 


1704... 


15.22 


1747.. 


15.26 


1790.. 


15.04 


1832.. 


15.73 


1874.. 


16.17 


1705... 


15.11 


1748.. 


15.11 


1791.. 


15.05 


1833.. 


15.93 


1875.. 


16.59 


1706... 


15.27 


1749.. 


14.80 


1792.. 


15.17 


1834.. 


15.73 


1876.. 


17.88 


1707... 


15.44 


1750.. 


14.55 


1793.. 


15.00 


1835.. 


15.80 


1877.. 


17.22 


1708... 


15.41 


1751.. 


14.39 


1794.. 


15.37 


1836.. 


15.72 


1878.. 


17.94 


1709... 


15.31 


1752.. 


14.54 


1795.. 


15.55 


1837.. 


15.83 


1879.. 


18.40 


1710... 


15.22 


1753.. 


14.54 


1796.. 


15.65 


1838.. 


15.85 


1880.. 


18.05 


1711... 


15.29 


1754.. 


14.48 


1797.. 


15.41 


1839.. 


15.62 


1881.. 


18.16 


1712... 


15.31 


1755.. 


14.68 


1798.. 


15.59 


1840.. 


15.62 


1882.. 


18.19 


1718... 


15.24 


1756.. 


14.94 


1799.. 


15.74 


1841.. 


15.70 


1883.. 


18.64 


1714... 


15.13 


1757.. 


14.87 


1800.. 


15.68 


1842.. 


15.87 


1884.. 


18.57 


1715... 


15.11 


1758.. 


14.85 


1801.. 


15.46 


1843.. 


15.93 


1885.. 


19.41 


1716... 


15.09 


1759.. 


14.15 


1802.. 


15.26 


1844.. 


15.85 


1886.. 


20.78 


1717... 


15.13 


1760.. 


14.14 


1803.. 


15.41 


1845.. 


15.92 


1887.. 


21.13 


1718... 


15.11 


1761.. 


14.54 


1804.. 


15.41 


1846.. 


15.90 


1888.. 


21.99 


1719... 


15.09 


1762.. 


15.27 


1805.. 


15.79 


1847.. 


15.80 


1889.. 


22.10 


1720... 


15.04 


1763.. 


14.99 


1806.. 


15.52 


1848.. 


15.85 


1890.. 


19.76 


1721... 


15.05 


1764.. 


14.70 


1807.. 


15.43 


1849.. 


15.78 


1891.. 


20.92 


1722... 


15.17 


1765.. 


14.83 


1808.. 


16.08 


1850.. 


15.70 


1892.. 


23.72 


1723... 


15.20 


1766.. 


14.80 


1809.. 


15.96 


1851.. 


15.46 


1893.. 


26.49 


1724... 


15.11 


1767.. 


14.85 


1810.. 


15.77 


1852.. 


15.59 


1894.. 


32.56 


1725... 


15.11 


1768.. 


14.80 


1811.. 


15.53 


1853.. 


15.33 


1895.. 


31.60 


1726... 


15.15 


1769.. 


14.72 


1812.. 


16.11 


1854.. 


15.33 


1896.. 


30.66 


1727... 


15.24 


1770.. 


14.62 


1813.. 


16.25 


1855.. 


15.38 


1897.. 


34.28 


1728... 


15.11 


1771.. 


14.66 


1814.. 


15.04 


1856.. 


15.38 


31898.. 


35.40 


1729... 


14.92 


1772.. 


14.52 















'Report of the Director of the Mint, for 1896, p. 221. 

^From 1687 to 1832, the ratios are taken from Dr. A. Soetbeer ; 
from 1833 to 1878, from Pixley and Abell's tables ; and from 1879 
to 1894, from daily cablegrams from London to the bureau of the 
mint. 

^Report for 1898, p. 252. Only nine months of 1898 are included. 



APPENDIX 



287 



FOREIGN TRADE OF THE UNITED STATES. 

Value of Exports and Imports of Merchandise for Each 

Year, from October 1, 1789, to June 30, 1898. i 



Exp'rts 
in Mil- 


Imp'rts 
in Mil- 


Year 
Ending 
Sept. 30. 


Exp'rts 
in Mil- 


Imp'rts 
in Mil- 


lions of 


lions of 


lions of 


lions of 


Doll'rs. 


DoU'rs. 


Doll'rs. 

2 


Doll'rs. 

3 


20 


23 


1827 


74 


71 


19 


29 


1828 


64 


81 


20 


31 


1829 


67 


67 


26 


31 


1830 


71 


62 


33 


34 


1831 


72 


95 


47 


69 


1832..... 


81 


95 


58 


81 


1833 


87 


101 


51 


75 


1834.... 


102 


108 


61 


68 


n835 


115 


187 


78 


79 


1836 


124 


177 


70 


91 


1837 


111 


130 


93 


111 


1838 


105 


96 


71 


76 


1839 


112 


156 


55 


64 


1840 


124 


98 


77 


85 


1841 


112 


123 


95 


120 


1842 


100 


96 


101 


129 


Year end 'g 






108 


138 


June 30, 






22 


56 


n843 


88 


42 


52 


59 


1844 


106 


103 


66 


85 


1845.... 


106 


118 


61 


53 


1846 


110 


118 


38 


77 


1847 


157 


122 


27 


22 


1848 


138 


149 


6 


12 


1849 


140 


141 


52 


113 


1850 


144 


174 


81 


147 


1851 


189 


211 


87 


99 


1852 


167 


207 


98 


121 


1853 


208 


264 


70 


87 


1854 


237 


298 


69 


74 


1855 


219 


258 


54 


54 


1856 


281 


310 


61 


79 


1857 


294 


348 


68 


72 


1858 


272 


263 


68 


72 


1859 


293 


381 


90 


90 


1860 .. .. 


334 


854 


73 


78 


1861 


220 


289 



Year 
Ending 
June 30. 



1862 
1868 
1864 
1865 
1866 
1867 
1868 
1869 
1870 
1871 
1872 
1873 
1874 
1875 
1876 
1877 
1878 
1879 
1880 
1881 
1882 
1883 
1884 
1885 
1886 
1887 
1888 
1889 
1890 
1891 
1892 
1893 
1894 
1895 
1896 
1897 
1898 



Exp'rts Imp'rts 
in Mil- in Mil- 
lions of lions of 
DoU'rs. Doll'rs. 



191 

204 
159 
166 
349 
295 
282 
286 
898 
443 
444 
522 
586 
518 
540 
602 
695 
710 
886 
902 
751 
824 
741 
742 
680 
716 
696 
742 
858 
884 
1080 
848 
892 
808 
888 
1051 
1231 



^Bureau of Statistics — Special sheets, 1898. 

^Exports given are totals of merchandise wholly produced in the 
United States, plus merchandise imported for export. 

^Imports include all merchandise imported, whether for con- 
sumption or export. 

^Previous to 1835 the millions are obtained by discarding the 
remaining figures; after 1885 the nearest complete millions are given. 

^Nine months only. 



AUTHORITIES CITED 



Books 



Ashley. An Introduction to English Economic History and 
Theory. Putnam's. 

Beach. Monopolies and Industrial Trusts. Central Law Journal 
Co. 

Bruce. Economic History of Virginia in the Seventeenth Century. 
Macmillan. 

Bullock. Introduction to the Study of Economics. Silver, 
Burdett. 

Claek. The Philosophy of Wealth. Ginn. 

CooLEY. The United States of America. Edited by N. S. Shaler. 
Appleton. 

Cunningham and McArthur. Outlines of English Industrial His- 
tory. Macmillan. 

Davenport. Outlines of Elementary Economics. Macmillan. 

Davenport. Outlines of Economic Theory. Macmillan. 

Ely. Outlines of Economics. Eaton & Main. 

Ely. The Labor Movement in America. Crowell. 

Fabian Essays. Charles E. Brown. 

FowLE. The Poor Law. Macmillan. 

Garnier. History of the English Landed Interest. Sonnensohein. 

Garvey. The Silent Revolution. Wm. & Frederic Cash. 

GiBBlNS. Industry in England. Scribner's. 

GiDE. Principles of Political Economy. Heath. 

GOMME. The Village Community. Scribner & Welford. 

GoNNER. The Socialist State. W. Scott. 

Green, A. S. Town Life in the Fifteenth Century. Macmillan. 

Green, J. R. Short History of the English People. Harper. 

Gross. The Gild Merchant. Clarendon Press. 

Hart. American History Told bj^ Contemporaries. Longmans. 

Harris. Moral Evolution. Houghton. 

Hinsdale. The American Government. Werner School Book Co. 

HOBSON. Problems of Poverty. Methuen & Co. 

HOBSON. The Evolution of Modern Capitalism. Scribner's. 

288 



AUTHORITIES CITED 289 

Hull House Maps and Papers. Crowell. 

Johnston. History of American Politics. Holt. 

KiRKUP. An Inquiry into Socialism. Longmans. 

Lalor. Cyclopedia of Political Science and Political Economy. 

Maynard, Merrill. 
Laughlin. The Elements of Political Economy. American Book 

Co. 
Marshall. Elements of Economics of Industry. Macmillan. 
Marshall. Principles of Economics. Macmillan. 
Marx. Capital. Humboldt. 

Medley. A Student's Manual of Constitutional History. Sim- 
kins. 
MuLHALL. Industries and Wealth of Nations. Longmans. 
Pantaleoni. Pure Economics. Macmillan. 
Parton. Captains of Industry. Houghton. 
Pollock. The Land Laws. Macmillan. 
Rae. Eight Hours for Work. Macmillan. 
Rogers. Six Centuries of Work and Wages. Putnam's. 
Roosevelt. The Winning of the West. Putnam's. 
SCHAFFLE. The Quintessence of Socialism. Humboldt. 
SCHLOSS. Methods of Industrial Remuneration. Williams & Nor- 

gate. 
SCHMOLLER. The Mercantile System. Macmillan. 
Seebohm. The English Village Community. Longmans. 
Shirres. An Analysis of the Ideas of Economics. Longmans. 
Small and Vincent. Introduction to the Study of Society. 

American Book Co. 
Smart. An Introduction to the Theory of Value. Macmillan. 
Smart. Studies in Economics. Macmillan. 
Smiles. Industrial Biography: Ironworkers and Tool-Makers. 

Harper. 
Smiles. Men of Invention and Industry. Harper. 
Spahr. An Essay on the Present Distribution of Wealth in the 

United States. Crowell. 
Stimson. Handbook to the Labor Law of the United States. 

Scribner's. 
Stubbs. Select Charters. Clarendon Press. 
Taussig. Wages and Capital. Appleton. 
Taylor. Introduction to a History of the Factory System. 

Bentley. 
Taylor. The Modern Factory System. Kegan Paul. 
Toynbeb. Lectures on the Industrial Revolution in England. 

Rivington's. 



390 AUTHORITIES CITED 

ViNOGRADOFF. Villeinage in England. Clarendon Press. 

Walker. Political Economy. Holt. 

Warner. American Charities. Crowell. 

Webb and Webb. The History of Trade Unionism. Longmans. 

Webb and Webb. Industrial Democracy. Longmans. 

Weeden. Economic and Social History of New England. Hough- 
ton. 

Wright. Industrial Evolution of the United States. Flood & 
Vincent. 



Periodicals, Reports, Manuals, Monographs 

Adams. The Department Store. Scribner's Magazine, January, 

1897. 
Addams. a Belated Industry. American Journal of Sociology, 

March, 1896. 
Brooks. Bibliography of the Sweating System. Municipal Affairs, 

Vol. I. 
Clow. Economics as a School Study. American Economic 

Ass'n, Vol. IV, No. 3. 
Clow. The Study of Municipal Finances. Quarterly Journal of 

Economics, Vol. X. 
Cooley. Theory of Transportation, Vol. IX, No. 3. Publications 

of American Economic Ass'n. 
Davis. Does Machinery Displace Labor? Forum, July, 1898. 
Donaldson. The Public Domain: Its History, with Statistics. 

U. S. Gov't Publications. 
Forrest. Anti-Monopoly Legislation in the U. S. American 

Journal of Sociology, January, 1896. 
Harris, W. T. Is there Work Enough for All? Forum, Vol. XXV. 
Howerth. a Programme for Social Study. American Journal of 

Sociology, May, July, and September, 1897. 
Howerth. Profit-sharing at Ivorydale. American Journal of 

Sociology, July, 1896. 
Hubert. The Business of a Factory. Scribner's Magazine, March, 

1897. 
Kelley. Aims and Principles of the Consumers' League. Ameri- 
can Journal of Sociology, November, 1899. 
Kelley. The United States Supreme Court and the Utah Eight 

Hour Law. American Journal of Sociology, July, 1898. 
Kelley. The Working Boy. American Journal of Sociology, 

November, 1896. 



AUTHORITIES CITED 391 

Lanier. The Working of a Bank. Scribner's Magazine, May, 1897. 
MacLean. Factory Legislation for Women in the United States. 

American Journal of Sociology, September, 1897. 
Manual of Statistics and Stock Exchange Handbook. Charles H. 

NicoU. 
McMaster. Century of Social Betterment. Atlantic Monthly, 

Vol. LXXIX. 
Monroe. Possibilities of the Present Industrial System. Ameri- 
can Journal of Sociology, May, 1898. 
Monroe. Profit-Sharing in the United States. American Journal 

of Sociology, May, 1896. 
Old South Leaflets. Directors of the Old South Work. 
Poor. Manual of Railroads. H. V. & H. W. Poor. 
Potter. Man and the Machine. North American Review, Vol. 

LXV. 
Report of Department of Labor. U. S. Gov't. 
Report of the Director of the Mint. U. S. Gov't. 
Report of Illinois Bureau of Labor Statistics, 1894. 
Sato. History of the Land Question in the United States. Johns 

Hopkins University Studies, 1886. 
Seligman. Classification of Public Revenues. Quarterly Journal 

of Economics, April, 1893. 
Statesman's Year Book. Macmillan. 
Statistical Abstract. U. S. Gov't. 
Steffbns. The Business of a Newspaper. Scribner's Magazine, 

October, 1897. 
Turner. The Significance of the Frontier in American History. 

Fifth Year Book National Herbart Society. 
Vincent. A Belated Frontier. American Journal of Sociology, 

July, 1898. 
White. The Business of a Wheat Farm. Scribner's Magazine, 

November, 1897. 
Williams. A Great Hotel. Scribner's Magazine, February, 1897. 
Wright. Contributions of the United States to Social Science. 

American Journal of Sociology, November, 1895. 
Wright. Do Labor-Saving Machines Deprive Men of Labor? The 

Chautauquan, Vol. XXV. 
Wright. The Factory System. Tenth Census of United States, 

Vol. II. 



INDEX 



Addams, reference to, 162. 

Agriculture, on manor, 51-57; in 
the colonies, 117; development 
of in the U. S., 157, 158; mod- 
ern 154-158; modern enclosure 
of common fields, 154, 155; pe- 
riods of development in Eng- 
land, 156. See Extractive 
Industries. 

America, colonization and settle- 
ment of, 114. 

American Federation of Labor. 
See Labor Organizations. 

American Journal of Sociology, 
reference to, 86, 189, 190, 220, 
274. 

American Railway Union. See 
Labor Organizations. 

Apprentices in Home Period, 63, 
64. 

Apprenticeship in Domestic Pe- 
riod, 105. 

Armada, Spanish, 96. 

Ashley, reference to, 47, 49, 69, 
70, 71, 72, 73, 74, 75, 91, 100, 103, 
106, 109, 110; on uncertainty of 
English foreign mark<^t in Do- 
mestic Period, 100; on periods 
of agricultural development in 
England, 156. 

Aulnager, work of, 78, 79. 

Bailiff, 56. 

Balk, use of on manor, 49. 

Bank of England, establishment 
of, 102; charter of, 102; loan 
funds in, 110. 

Barter, 69; in England during 
Domestic Period, 101 ; frequency 
of in colonies, 125, 126. 

Bills of Exchange in colonies, 
126. 

Black Death, significance of, 68-71. 

Boon days, 53. 



Bordar, 52. 

Bridgewater, Duke of, and Eng- 
lish canals, 96. 

Bruce, on colonial manufactures 
in comparison with English, 
118, 119; reference to, 85, 120, 
122, 125, 130. 

Bullock, on statistics of expendi- 
ture, 43; on Sequence of agri- 
cultural development in U. S., 
157 ; reference to, 191. 

Bureau of Labor Statistics, Illi- 
nois, on growth in value of city 
land, 234. 

Business, study of actual, 21, 22. 

Business, forms of, 22. 

Canals, English, 148; American, 
148. 149; English, and Duke of 
Bridgewater, 96. 

Capital, definition of, 62, 218; rela- 
tion of to labor, 246; relation 
of to productive process, 26; 
large extractive, transforming, 
transporting, and transferring 
industries compared with refer- 
ence to dependence on, 172, 173; 
two objects for borrowing of, 
237, 238. 

Capitalism, modern, 171-175; com- 
parison of with Home System, 
171; with Gild System, 171; 
with Domestic System, 171, 172. 

Capitalists, in Home Period, 62; in 
Gild Period, 80; English in Do- 
mestic Period, 109, 110; in colo- 
nies, 129. 

Captain of Industry. See Under- 
taker. 

Census, U. S., for 1890, quoted for 
statistics of occupation, 21; first 
in U. S., 114; of persons in Eng- 
lish occupations in 1760, 155. 
See Occupations. 



292 



INDEX 



293 



Chandler, F. K., extract from 
report of, 233, 337. 

Charles V, and English trade, 
99, 100. 

Chicago Real Estate Board, refer- 
ence to, 233. 

Clark, George Eogers, service of 
in Northwest Territory, 114. 

Clark, J. B., reference to, 194. 

Clothier, English, as undertaker 
in Domestic Period, 89. 

Clow, Plan by, 227; reference 
to, 192. 

Coach, first English, used by 
Elizabeth, 96, 97; clumsiness of, 
96, 97; increase in use of, 97. 

Coinage, debased by Henry VIII 
and Edward VI, 101; for low 
countries, 101, 102. 

Coins, value of at various times in 
England, 101; value of as 
affected by decrease in size, in- 
crease in silver, etc. , 101 ; value 
of silver compared with gold, 
102; value of, compared with 
bullion, 102. 

Combination Laws of George III, 
181. 

Commodity, defined and relation 
of to a good and to utility, 
28, 29. 

Commutation of services, 69. 

Companies, East India, Plymouth, 
London, Hudson Bay, Chartered 
of South Africa, 99. 

Conditions of labor and wages, 
modern, 178, 179. 

Consumers' Leagues, 274. 

Consumption, 272-277; personal, 
how to gather and compare 
statistics of, 41, 42, 43; kinds of, 
272; social, 274. 

Contract and status, significance 
of in determining economic 
relations, 35, 36; freedom of in 
Home Period, 64; freedom of in 
Gild Period, 83; in England in 
Domestic Period, 112, 113; in 
colonies, 130 - 132; limitations 
upon freedom of, 204. 

Convertible husbandry, 71. 

Cooley, reference to, 94; on rail- 
way freight rates in the U. S. , 
150. 



Cooperation, directions for study 
of, 22; reasons for, 174. 

Corn Laws, English, 107. 

Corporation, directions for study 
of, 22; causes of, 174. 

Cotter, 52. 

Cotton, increase in manufacture 
of in England after great inven- 
tions, 139, 140. 

Craft-gild, formation of, 63; num- 
ber of in Gild Period, 72; mem- 
bership of, 77; relation to Mer- 
chant Gild, 77; purposes of, 78; 
relation to town officials, 77, 78: 
compared to trade union, 83, 
84. _ 

Cunningham and McArthur, ref- 
erence to, 51, 69, 71, 93, 100, 101, 
102, 106. 

Custom, force of in Home Period, 
64. 

Davenport, on economic desir- 
ability, 23, 24; reference to, 191. 

Davis, reference to, 134. 

Definition, tests of good, 32. 

Demand and supply, use of terms, 
209; relation to market price, 
211; terms often used with little 
meaning, 211. 

Demesne lands, 50. 

Department of Labor Report No. 
8, reference to, 177. 

Dependents, defined and classified, 
31; in Home Period, 60; in Gild 
Period, 75, 76; English in Do- 
mestic Period, 104, 105; in the 
colonies, 128; statistics of mod- 
ern, 162, 163; efforts to deal with 
problem of, 163-166. 

Desirability, compared to utility, 
23. 

Diagrams, use of in stating eco- 
nomic facts, 19, 20, 21, 38. 

Diminishing returns, law of, 
statement and discussion of, 255. 

Distribution, 225-249 ; definition 
of, 221 ; shares of, 225 ; the prob- 
lem of, 225. 

Dividends, world income and 
national income, 226; relation 
of to amount of goods produced, 
226; discussion of world divi- 
dend, 247; discussion of na- 
tional, 247. 



294 



INDEX 



Domesday Survey, 52. 

Domestic Period of industry, 47; 
in England, 85-113; limits of in 
America, 113; discussion of , 113- 
133 ; united with Home System 
in colonies, 122; transition to 
Factory System in U. S., 145. 

Donaldson, on the public domain, 
167; on American land tenure, 
115. 

Economic terms, right use of, 36 ; 
statements and questions, how 
made by students, 39 ; material, 
sources of, 191. 

Edward III and the Flemish 
weavers, 79. 

Eight-Hour Day, discussion of, 
264. 

Ely, on progress of labor move- 
ment, 183; reference to, 67, 182, 
191. 

Employer, relation of to employed 
previous to Factory Period, 111, 
112. See Undertaker. 

Enclosure, after Black Death, 70, 
71. See Agriculture. 

Entail, 79. 

Exchange, conditions of, 201, 202 ; 
relation of money to, 201; two 
valuations made in, 201 ; advan- 
tage of, 200-202 ; motives for, 202. 

Exports, early American, 117, 118. 

Extractive Industries on manor, 
56, 57; in Gild Period, 67-71; 
English, in Domestic Period, 
91; in early America, 116-118. 
See Agriculture, Mining, 
Fishing, Lumbering, etc. 

Extractors, as producers, 31. 

Fabian Essays, on economic para- 
sitism, 166. 

Factors of production, ownership 
of, 239. 

Factory Laws, English, 180; 
American, 180, 181. 

Factory Period of industry, 47; 
general discussion of, 134-189; 
transition to in U. S., 145. 

Family Period of industry, 47. 

Federation of Labor, American, 
182. 

Feudalism, description of, 60, 61. 

Fishing, in England, in Domestic 
Period, 93; in the colonies, 117, 



118; recent in England and the 
U. S., 158, 159. 

Flemish weavers, importation 
of, 79. 

Forrest, reference to, 186. 

Forum, reference to, 187. 

Fowle, on English poor-law ad- 
ministration, 164. 

Franklin, on means of colonial 
travel, 124, 125. 

Freedom of contract. See Con- 
tract. 

Freight- rates, colonial, on water 
and land, 124; railway, 1860 
compared with 1894, 158. 

Frontier, significance of, 86, 87. 

Fulling mills, in colonies, 121. 

Function, society, landlord, cap- 
italistic, undertaking, ordinary 
labor, importance of to any pro- 
ductive process, 33. 

Gamier, reference to, 60, 79, 108. 

Garvey, on ploughing up roads, 
94; on seventeenth century op- 
position to coaches, 97; on isola- 
tion of English people in eight- 
eenth century, 98. 

Gibbins, on specialization of 
manufactures in certain dis- 
tricts, 143, 144; on first English 
railway, 147; on fairs and trad- 
ing in England, 159; on decay 
of English small farmer, 169; on 
condition of English wage- 
workers early in nineteenth 
century, 178; reference to, 85, 
95, 155. 

Gild Merchant, purpose of, 59. 

Gild Period of industry, 47. 

Gild Period of industry in Eng- 
land, 67-84; characteristics of, 
73, 74. 

Gild System, change from to Do- 
mestic, 88; no general develop- 
ment of in America, 122; break- 
down of, 105. 

Gomme, reference to, on land 
holding, 57. 

Good, relation of to utility and 
commodity, 29. 

Goods, classified, 31; consumption 
goods, 218; different orders of, 
218; not mere quantity of, but 
valuable product desired, 246. 



INDEX 



295 



Graphics, use of in stating indus- 
trial facts, 19, 20, 21, 38. 

Green, A. S., on English medieval 
roads, 94, 95; on subordination 
of English towns to nation, 106; 
reference to, 67, 71, 76, 105. 

Green, J. R., on condition of Eng- 
lish masses in eighteenth cen- 
tury, 103; on English Empire in 
the East, 108. 

Grist mills in colonies, 121. 

Gross, reference to, 59, 73, 99. 

Harris, George, on division of 
labor, 44, 45. 

Harris, W. T., reference to, 87, 
134, 162. 

Hart, reference to, 114. 

Henry II and a sliding scale, 79. 

Henry VI and weights and meas- 
ures, 78. 

Henry VII and weights and meas- 
ures, 78. 

Henry VIII and trade with Spain, 
99, 100; and the monasteries, 
108. 

Heriot, 52. 

Hinsdale, on rents of land in 
colonial America, 115. 

Hobson, on English roads in eight- 
eenth century, 95; on increase 
in English cotton manufacture, 
139, 140 ; on periods of develop- 
ment of English manufacture, 
142, 143 ; on effect of new motive 
power on iron machinery, 141; 
on per cent of persons dying 
dependent on charity, 163; on 
English factory laws, 180, 181; 
reference to, 85, 92, 171. 

Home Period of industry in Eng- 
land, 46-56; characteristics of, 
64; limits of, 64, 65. 

Home System united with Do- 
mestic System in the colonies, 
122. 

Homes, statistics of rented and 
owned in the U. S. in 1890, 168. 

Howerth, reference to, 189, 190. 

Hull House maps and papers on 
family incomes, 42. 

Ideals, change in English national 
in Domestic Period, 106-108. 

Industry, periods of, 47, 67, 85, 
184. 



Interdependence of men and 
nations, 159. 

Interest, capital's share of prod- 
uct, 225 ; discussion of, 237 ; rate 
of, 238. 

Inventions, the great, work of 
many men, 138. 

Iron, increase in English manu- 
facture of, 141; production of 
in the U. S., 280; prices of 
1850-1894, 281. See Mining. 

Iron-mining in Gild Period, 71. 

Jameson, and the Transvaal raid, 
99. 

Johnston, on American tariff, 184. 

Kelley, reference to, 177, 220, 274. 

Knights of Labor, formation of, 
182. See Labor Organiza- 
tions. 

Labor, relation of to capital, 246 ; 
conditions of, 258. 

Labor class. See Wage- Work- 
ers. 

Labor Organizations, discussion 
of, 261. 

Labor question, rise of in Gild 
Period, 82, 83. 

Laissez faire, definition of, 185; 
reaction against, 186. 

Land, feudal tenure of in England 
changing, 108, 109. 

Landholding in colonial Amer- 
ica, 114, 115; modern in the U. 
S., 167, 168; statistics of homes 
owned and rented in the U. S. 
in 1890, 168; modern in Eng- 
land, 168-171. 

Landlords, in Home Period, 61, 62; 
in Gild Period, 79, 80; English, 
in Domestic Period, 108, 109 ; in 
the colonies, 128, 129; modern 
English, ratio of to tenants, 169, 
170. 

Laughlin, reference to, 191. 

Law of diminishing returns, 
statement and discussion of, 
255. 

Laws, modern, to control indus- 
try, 186, 187. See Society. 

Legislation, English, respecting 
American colonies, outline of, 
115, 116; effect of on American 
industrial development, 116, 
See Society. 



296 



INDEX 



Loan funds, increase of in Eng- 
land, 110. 

Low Countries, value of coins of 
compared with English at time 
of William III, 101, 102. 

Lumbering, English, in Domestic 
Period, 93; in the colonies, 117; 
recent, in England and the 
United States, 158, 159. 

Machine, distinguished from a 
tool, 135, 136. 

Machinery and tools in colonies, 
120, 121; modern development 
of, 136, 137; tools of, 136, 137; 
transmitting mechanism of, 137 ; 
motive power of, 137, 138; in- 
vention of for cotton manufac- 
ture, 138, 139; introduction of 
modern into the U. S., 144. 

MacLean, reference to, 179. 

McMaster, reference to, 116. 

Magna Charta, 74, 112. 

Man, relation of to productive 
process, 26 ; economic classifica- 
tion of, 31 ; relation of to pro- 
duction, 221 ; relation of to 
utilities, 225 ; relation of to con- 
sumption, 272. 

Manager, the modern. See Under- 
taker. 

Manor, bird's-eye view of, 49, 50; 
change of after Black Death, 69, 
71 ; cultivation of, 51 ; lord of, 
50; tenants of, 50; manor 
house, 50. See Home Period. 

Manual of Statistics and Stock 
Exchange Handbook, tables 
from, 279, 280, 284, 285. 

Manufactures, value of in U. S. 
in 1790, 120 ; kinds of given over 
to machine processes, 141, 142; 
increase of in the U. S. in last 
century, 146; leading trans- 
forming states in 1890, 146, 147; 
geographical center of in 1890, 
147. See Transforming In- 
dustries. 

Manufacturers. See Transform- 
ers. 

Market, English, enlargement of 
in Domestic Period, 105 ; lack of 
in colonial America, 116, 117; 
early American, 160; size of 
208. 



Marshall, on number of English 
small tenants, 170; on law of 
diminishing returns, 255; refer- 
ence to, 191, 218. 

Marx, on distinction between a 
tool and a machine, 136. 

Medley, on vicious effects of old 
English poor-laws, 164; refer- 
ence to, 61, 70. 

Mercantilism, in England, 106, 107. 

Merchants of the Staple, 73. 

Mining, during Home Period, 56, 
57; English, in 1720, 93; in the 
colonies, 118; recent in Eng- 
land and the U. S., 158. 

Monasteries, effect of suppression 
of by Henry VIII, 108, 109. 

Money, forms of in colonies, 
125, 126 ; examples of use of, 196 ; 
nature of, 204; changes in the 
value of, 250 ; some uses of, 250 ; 
important facts relating to, 253. 

Money economy taking place of 
natural economy in England, 
100, 101. 

Monopoly, its relation to produc- 
tion and distribution, 260. 

Monroe, reference to, 189. 

Mulhall, reference to, 151 ; on foot- 
tons of power devoted to pro- 
duction and transportation, 153. 

Municipal affairs, reference to, 187. 

Municipal finances, plan for study 
of, 227. 

Nation, English, ascendency of 
over towns in Domestic Period, 
105, 106. 

Natural economy giving way to 
money economy in England, 
100, 101. 

Natural resources, relation of to 
production, 26; defined, 217; 
ownership of, 232 ; the unearned 
increment, 233. 

Navigation acts, English, 107. 

Newspapers, English, when start- 
ed, 103. 

Non-Importation agreement, quo- 
tation from, 131, 132. 

Occupations, observation of, 17; 
classification of, 18; diagrams 
of suggested, 20, 21 ; compari- 
son of local with national, 20, 
21; census statistics of in the 



INDEX 



297 



U. S. in 1890, 21 ; English statis- 
tics of in 1688, 92, in 1769, 155. 

Old South Leaflets, reference to, 
124, 125. 

Open fields, 50. 

Ordinance of 1787 on primogeni- 
ture in the U. S. , 167. 

Ownership and property right, 
defined, 34; significance of to 
modern industry, 33, 34, 35, 36; 
private and public discussed, 34; 
kind of proposed by anarchy, 
socialism, communism, 34. See 
Property. 

Padrone system, Italian, com- 
pared to that of indentured serv- 
ants, 127. 

Pantaleoni, on commodity, 28. 

Parasites, defined, 31; who are 
they? 166. 

Parliament, changes of in relation 
to the crown during Domestic 
Period, 106-108. 

Partnership, directions for study 
of, 22 ; causes of, 174. 

Parton, reference to, 134. 

Peasants' Revolt, 70. 

Piers the Plowman, quotation 
from, 72. 

Poor. See Dependents. 

Poor Laws of Elizabeth, 104. 

Poor's Manual of Railways on 
American railways, 149, 150. 

Population, decrease of agricul- 
tural in England, 155, 156; in 
the U. S., 157, 158; relation of 
to natural resources, 257. 

Postal system, establishment of in 
England, 98; cost of, 98. 

PrecaricB, 53. 

Price, buyer's, seller's, market, 
defined and illustrated, 40, 41; 
functions of market, 40, 41; 
defined, and buyer's and seller's 
prices, 201 ; social or market 
price determined, 205; persons 
affected by changes of, 251. 

Primogeniture, 79. 

Printing-press, Caxton's, 74; in 
colonies, 121. 

Producer and non-producer de- 
fined, 30, 31. 

Production, formulae for eco- 
nomic, 26; nature of, 216; def- 



inition of, 217; formulae of, 
217-219; control of by society, 
219; relation of man to, 221; 
fundamentally desirable result 
of, 222; distinction between 
wealth and services, 231. 

Profit-sharing, directions for study 
of, 22. 

Profits, discussion of, 229; man- 
ager's share of product, 225. 

Property, private, in Home Pe- 
riod, 64; in Gild Period, 83; in 
England in Domestic Period, 
112, 113; dependent upon people, 
112, 113; in colonies, 130-132; 
social versus private, what is 
the tendency? 187, 188. See 
Ownership. 

Public domain, importance of and 
management of in the U. S., 167. 

Public opinion, relation of to 
production, 26. 

Quarterly Journal of Economics, 
plan by Frederick R. Clow, 227. 

Rae, reference to, 264. 

Railways, growth of English, 1830- 
1895, 147 ; growth of American, 
1830-1895; 149, 150; first Eng- 
lish, 147, 148; first American, 
149; consolidation of in the 
U. S., 149, 150. 

Reeve, 56. 

Rent, discussion of, 232; share of 
owners of natural resources, 225. 

Report of the Director of the Mint, 
tables from, 282, 286. 

Review of Reviews, reference to, 
187. 

Roads, colonial, 123-125. See 
Transportation. 

Rogers, on medieval clergy, 74, 
75 ; on eighteenth century roads 
compared with those of thir- 
teenth, 98 ; on the village trader 
and peddler, in England, 160 ; on 
lack of differentiation in occu- 
pations of middle ages, 160, 161. 

Roman roads, decay of, 94. 

Roosevelt, reference to, 114. 

Sailing vessels, giving place to 
steamships, 151. See Ships and 
Transportation. 

Sato, references to, 109, 114, 115; 
on the Ordinance of 1787, 



298 



INDEX 



167; on the importance of the 
General Land Office, 167. 

Schloss, reference to on forms of 
business, 23. 

SchmoUer, reference to, 106. 

Schools, English in eighteenth 
century, 103. 

Scribner's Magazine, quoted for 
conduct of great businesses, 27. 

Seebohm, reference to on manor, 
49; on villein's services, 53-55. 

Seligman, on definitions of taxes, 
etc., 268. 

Seneschal, 56. 

Serf, the villein a, 55. 

Servants, defined and classified, 
31; in Home Period, 59; in Gild 
Period, 74, 75 ; in England in Do- 
mestic Period, 103 ; in the colo- 
nies, 127, 128; indentured, 127; 
specialization of in Factory 
Period, 160, 161. 

Services, defined, 31 ; ratio of 
those who produce to those who 
produce wealth, 161. 

Sheep farming in England, 70, 
80, 81. 

Ships, English in Domestic Period, 
96; colonial, number of, 126, 
127. See Vessels and Trans- 
portation. 

Shirres, on utility, 27, 28. 

Single Tax, mention of, 233. 

Six Companies, Chinese, system 
of compared to that of inden- 
tured servants, 127. 

Slaves in Home Period, 52, 62; 
number of in U. S. in 1790, 127; 
number of compared with that 
of indentured servants in Vir- 
ginia in 1671, 127. 

Small and Vincent, reference to, 
87. 

Smart, quotation from, 275. 

Smiles, reference to, 134. 

Social Democracy. See Labor 
Organizations. 

Society, relation of to productive 
process, 26; political functions 
of in Home Period, 60, 61 ; in 
Gild Period, 78, 79; relation of 
to English industry in Domestic 
Period, 105-108; control of in- 
dustry by in colonies, 130-132; 



superiority of to the individual 
manor business, 174, 175; rela- 
tion of to production, 219. See 
Legislation. 

Socmen, 52. 

Spahr, on statistics of income, 42 ; 
on statistics of homes, 168; on 
wage-worker's loss of time, 179, 
180. 

Staple towns, 73. 

Statesman's Year-Book, on Eng- 
lish railways, 148 ; on registered 
tonnage of English vessels, 1840- 
1890, 151; reference to, 155; on 
poor rates, 163 ; on ratio of Eng- 
lish land owners to those not 
owning land, 169, 170. 

Statistical Abstract, tables from, 
20, 280, 281, 283. 

Status and contract, significance 
of in determining economic re- 
lations, 35, 36. 

Statutes of laborers, cause of, 69; 
idea of, 75, 76. 

Steamships, substitution of for 
sailing vessels, 151. 

Steward, 56. 

Stimson, reference to, 134, 179, 
220. 

Stock company, directions for 
study of, 122. 

Stubbs, reference to, 112. 

Suffrage in England and the U. 
S., 183, 184. 

Surveying of victuals, 76. 

Survivals of former methods of 
industry into the Factory Pe- 
riod, 174. 

Tables, illustrating report of 
F. R. Chandler, 235; showing 
ownership of factors of produc- 
tion, 240 ; sharing the products, 
243; production and distribu- 
tion, 259; yearly cotton prod- 
uct of the U. S., 279; pig 
iron production of the U. S., 
380; freight rates on wheat, 
by lake, canal, and rail from 
Chicago to New York, 280; 
prices of pig iron, rolled bar 
iron, iron and steel rails, per 
ton, and of cut nails per keg 
of 100 lbs., 281; world's prod- 
uct of gold and silver, 383; 



INDEX 



299 



freight rates on grain and 
flour; 283; United States 
anthracite coal statistics, 284; 
prices of crude oil, 285; com- 
mercial ratio of gold to silver, 
286; foreign trade of the 
U. S., 287. 

Tariff question, reference to, 265. 

Tariffs, English and American, 
184, 185. 

Taussig, reference to on produc- 
tion, 45 ; on capital, 62. 

Taxes, society's share of product, 
225 ; nature of, 226 ; compulsory- 
contributions for social pur- 
poses, 267. 

Taylor, reference to, 85, 111 ; on 
first English railways, 147, 148; 
on extension of suffrage to Eng- 
lish wage-workers, 183, 184. 

Three-field system of agriculture, 
51. 

Tools and machinery in colonies, 
120, 121. 

Tools distinguished from ma- 
chines, 135, 136. 

Towns, independence of in Gild 
Period, 76, 77 ; English, subordi- 
nation of to nation in Domestic 
Period, 105, 106; number of in 
early U. S., 114. 

Toynbee, on problem of the work- 
ing man, 104 ; on eighteenth and 
nineteenth century enclosures 
in England, 154, 155. 

Traders. See Transferrers. 

Trade-combination, relation of to 
production and distribution, 
260. 

''^rade unions, questions on, 67, 68 ; 
compared to craft gild, 83, 84; 
growth of in England, 181, 182; 
in the U. S., 182, 183. 

Transferrers, as producers, 31; in 
Home Period, 59; in Gild Pe- 
riod, 73. 

Transferring, English in Domestic 
Period, 99-102; various com- 
panies, 99; uncertainty of for- 
eign markets, 99, 100; natural 
economy and money economy, 
100, 101; coinage, prices, and 
banks, 101, 102; colonial, 125, 
126; modern, 159, 160. 



Transformers, as producers, 31; 
differentiation of, 58; in Gild 
Period, 72; increase of in 
country in Domestic Period, 
90, 91. 

Transforming industries in Home 
Period, 57, 58; method of in 
Domestic Period, 89, 90, 91 ; in 
the colonies, 118, 125; localized 
by machine production, 143. 
See Manufactures. 

Transportation, in England in 
Domestic Period, 94-99; the 
ways, 94, 95; the vehicle, 96, 97; 
the motive power, 97; in the 
colonies, 122-125; in England 
previous to 1830, 147 ; in the U. 
S. previous to 1830, 148, 149; 
growth of English railroads and 
canals, 147, 148; extension of 
railroads in the United States, 
149, 150 ; significance of modern, 
152-154. 

Transporters, as producers, 31; 
during Home Period, 58; in 
Gild Period, 73 ; class of in Do- 
mestic Period, 98, 99. 

Trust, directions for study of, 22. 

Tudors, and English towns, 106; 
and national ideals, 106, 107. 

Turner, reference to, 86, 114. 

Turnpikes, laws establishing, 95. 

Two-field system of agriculture, 
51. 

Undertaker, relation of to produc- 
tion, 26; in Home Period, 62, 63; 
in Gild Period, 80, 81 ; in Domes- 
tic Period, 110, 111; in colo- 
nies, 129, 130 ; in Factory Period, 
175 ; a kind of workman, 229. 

Unearned increment, illustration 
of, 233; meaning of, 233. 

Utility, defined, 23; forms of, 
24, 25; classification of, 27- 
29 ; actual and potential defined, 
28; relation of to commodity 
and good, 28, 29; kinds of , 193; 
illustration of, 193; marginal, 
194; quantity of, 193; absolute 
and effective, 194; distinguished 
from value, 197 ; comparison of, 
196; general discussion of, 191- 
216; variations in kind and 
quantity of, 220; abundance of 



300 



INDEX 



coupled with poor living, 245. 
See Value. 

Valuation, causes of individual 
and social, 211. 

Value, distinguished from utility, 
197; general discussion of, 191- 
216; formula for, 197. See 
Utility. 

Vessels, tonnage of, in England, 
1840-1890, 151; in the U. S. in 
1896, 151. See Ships and Trans- 
portation. 

Villein, 52-55. See Manor. 

Vincent, on trend of migration, 
86, 87 ; reference to, 86. 

Vinogradoff , reference to, 52. 

Virgate, 52-55. See Manor. 

Wages, wage-workers' share of 
product, 225 ; discussion of, 230 ; 
relation of to population, 257; 
and conditions of labor, modern, 
178, 179. 

Wages system, rise of in England, 
111, 112. 

Wage-worker, in Home Period, 
63, 64; in Gild Period, 81, 82, 83; 
in England, in Domestic Period, 
111, 112; relations of to employ- 
ers previous to Factory Period, 
111, 113; in colonies, 130; rela- 
tion of to tools, material, motive 
power, work place, and em- 
ployer, in Home Period, Gild 
Period, Domestic Period, and 
Factory Period, 171, 172; in- 
crease of during the Factory 
Period, 175, 176; personal free- 
dom of, 176, 177; homes of, 
177, 178; combinations of in 
England, 181, 182; in the U. S., 

182, 183; political status of, 

183, 184. 



Walker, reference to, 191. 

Waltham, first complete cotton 
factory of U. S. in, 145. 

Wants, equalization of, 195 ; satis- 
faction of, 196. 

Warner, on number of men out 
of work, 162. 163 ; on administra 
tion of charity in the U. S., 165; 
on signs of promise, 165, 166. 

Wat Tyler's Rebellion, 70. 

Wealth, defined, 31 ; ratio of 
producers of to producers of 
services, 161. 

Webb and Webb, reference to, 
67, 83; on number of English 
trade unionists in 1892, 181, 182; 
definition of trade union, 261; 
on relation of trade union to 
craft gild, 262 ; on educational 
value of trade union, 263. 

Weeden, references to, 85, 118, 
120, 122, 125, 126, 128, 129, 130, 
131; on travel in the colonies, 
123; on the "Yankee coasting 
skipper," 123, 124. 

William I, 49, 50 ; as lord of man- 
ors, 53. 

Worsted manufacture, location of 
in Domestic Period, 91. 

Wright, on lumber exports from 
America in 1792, 117; on value 
of colonial manufacture, 120; 
on introduction of cotton ma- 
chinery into the U. S. , 144 ; on 
first complete factory in U. S., 
145; reference to for compari- 
son of Factory System with Do- 
mestic System, 177; reference 
to, 85, 117, 118, 120, 137, 179. 

Young, on English roads in eight- 
eenth century, 95. 



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